Roth 401(k) vs Taxable Brokerage After Match
After capturing the full **employer match**, extra dollars can go to **Roth 401(k)** (tax-free growth) or a **taxable brokerage** (liquid, no RMD rules). The better choice hinges on tax bracket now vs retirement.
Step by step
1. Max the match first
Match is immediate 50-100% return—prioritize before either option.
2. Compare marginal rate
Low bracket today favors Roth; high bracket may favor pre-tax 401(k).
3. Keep emergency fund
Brokerage liquidity does not replace cash reserves.
Roth 401(k) vs taxable
Tax-advantaged growth vs access before 59½ without special rules.
- Roth 401(k): Tax-free qualified withdrawals; higher annual limit than IRA.
- Taxable brokerage: Flexible; capital gains tax; no contribution limit.
Use our calculators
Common mistakes
- Skipping match for brokerage
- Ignoring plan fees in either account
FAQ
Does Roth 401(k) have income limits?
No—unlike Roth IRA; check plan availability.