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Nearly all 401(k) plans now allow for workers to save money<\/a> in Roth accounts, after legislative changes<\/a> led adoption to jump significantly in recent years. <\/p>\n A Roth account<\/a> is funded with after-tax money. Savers pay income tax up front on their 401(k)<\/a> contributions but don’t pay tax when they withdraw money later, with some exceptions<\/a>.<\/p>\n Financial planners generally recommend Roth savings for workers who are likely in a lower tax bracket now than when they retire, like young people who are early in their careers<\/a>. A Roth 401(k) can be particularly beneficial, because it lets workers put aside more per year than a Roth IRA ($24,500<\/a> compared with $7,500<\/a>, respectively, in 2026), and doesn’t have the income restrictions<\/a> that come with Roth IRA contributions.<\/p>\n Nearly all employers offering a 401(k) plan now allow workers to contribute to Roth 401(k) accounts: About 96% of plans permitted Roth savings in 2024, according to a recent report by the Plan Sponsor Council of America, a trade group representing employers with workplace retirement plans.<\/p>\n That share is up from 93%<\/a> the prior year. In 2020, 86% of plans offered a Roth option, and in 2015, it was about 60%, according to PSCA data. <\/p>\n About 22% of 401(k) savers made Roth contributions in 2024, up marginally from 21% the prior year, it found. <\/p>\n More from Financial Advisor Playbook:<\/p>\n Here’s a look at other stories affecting the financial advisor business.<\/p>\n Secure 2.0’s effect on Roth availability<\/p>\n Workers traditionally save for retirement on a pretax basis, meaning they get a tax break on 401(k) contributions now but pay taxes on their savings and investment earnings later.<\/p>\n In years past, offering more choice to workers was a large motivator for employers to add Roth savings, said Hattie Greenan, the PSCA’s research director.<\/p>\n But legislation known as Secure 2.0 accelerated the trend, she said. <\/p>\n For example, the legislation, which was passed in 2022 during the Biden administration, requires that all “catch-up” contributions<\/a> from workers age 50 or older who are high earners be made to Roth accounts.<\/p>\n Beginning in 2026<\/a>, catch-up contributions will generally have to be made as Roth if you earned\u00a0more than $150,000<\/a>\u00a0from your current employer in 2025.<\/p>\n “This definitely helped increase [Roth availability] into the high 90s,” Greenan said. “We’ve seen an increase north over the last 10 years anyway, but it definitely increased the rate of adoption.”<\/p>\n Additionally, the law gave employers the option<\/a> to offer 401(k) matches<\/a> in Roth accounts. <\/p>\n About 19% of 401(k) plans have added or were in the process of adding this option in 2024, and a third of plans are considering it, according to PSCA data.<\/p>\n Why the government likes Roth savings<\/p>\n The government is likely expanding Roth 401(k) access points for workers in order to collect more revenue for federal coffers sooner rather than later, said Philip Chao, a certified financial planner and founder of Experiential Wealth, based in Cabin John, Maryland.<\/p>\n “The government’s motivation is obvious: We want to collect the taxes now, and don’t really want to give everybody a tax break [up front], because we need the money,” Chao said. <\/p>\n In 2025, U.S. debt totaled nearly 100%<\/a> of gross domestic product, according to the Congressional Budget Office. In other words, U.S. debt is as large as the U.S. economy.<\/p>\n