401(k) Vs. Roth 401(k): Which Is Best For High Earners?

Should high earners stop contributing to their traditional 401(k) and contribute instead to their Roth 401(k)? Robert 'Bob' Powell answers this question as part of Decoding Retirement's special segment, Ask Bob. Silvur Technology Services CEO and retirement expert Rhian Horgan joined Powell on this week's Decoding Retirement to break down everything you need to know about Medicare Advantage Plans, market exits, and more. Powell was also joined by Yahoo Finance Senior Columnist Kerry Hannon to discuss the challenges of aging and advice for those age 50 and older who are looking for work. Question: Should high earners stop contributing to their traditional 401(k) and contribute instead to their Roth 401(k) if they have one, and consider other strategies to avoid higher taxes later? Answer: Tax expert Ed Slott advises high earners to rethink their contributions to pre-tax 401(k)s and IRAs. The reason? Future tax implications. Under the 10-year rule for inherited IRAs, non-spouse beneficiaries must withdraw the funds within a decade, which could push them into higher tax brackets. But there are ways to manage these taxes – like converting to a Roth IRA, using life insurance, or making charitable donations directly from your IRA. If you've got questions about money or retirement, email us at AskBob@yahoofinance.com. Retirement planning doesn’t mean locking up your money for a rainy day and forgetting about it. Planning your future means reacting to events today. Decoding Retirement gives you the tools to navigate the years ahead, and take action now! Yahoo Finance's Decoding Retirement is hosted by Robert Powell, and produced by Zach Faulds. Find more episodes of Decoding Retirement at https://finance.yahoo.com/videos/series/decoding-retirement. Thoughts? Questions? Fan mail? Email us at yfpodcasts@yahooinc.com. Editor's note: This post was written by Zach Faulds.