Before-Tax or Roth? – Hess Benefits

There are two tax-advantaged ways you can contribute to the savings plan. You can make before-tax payroll deductions or after-tax “Roth” contributions. This chart can help you decide whether your contributions should be before-tax, Roth or a combination of both.

	BEFORE-TAX CONTRIBUTIONS	ROTH CONTRIBUTIONS
Funding	Funded with before tax dollars.	Funded with after-tax dollars.
Tax Benefits	You defer paying taxes; your balance grows tax free.	You pay taxes up front, but your contributions grow tax free.
Tax Treatment When You Withdraw The Money In Retirement	You pay taxes on before-tax contributions and earnings.	You pay no taxes on contributions or earnings if you’re at least 59½ (or you die, or you become disabled and you’ve held the Roth contributions for at least five years).
Why?	You think you’ll be in a lower tax bracket when you retire. You’re OK not knowing exactly what you’ll owe when you retire.	You think you’ll be in a higher tax bracket when you retire. You want the certainty of knowing exactly how much you’ll have in retirement.