The decision to make a pre-tax/deductible contribution to a Traditional 401(k) or IRA or an after-tax contribution to a Roth 401(k) or Roth IRA is based on the income tax rate of the individual at the time of the contribution, and the anticipated tax rate in the future when withdrawals are taken. The difference in tax rates can be caused by an investor’s personal situation and/or tax policy over time. This chart shows a typical wage curve and the general “rule of thumb” about what type of contribution may be most appropriate based on current income and the anticipated bracket in retirement. An additional consideration is to maintain a healthy mix of taxable, tax-free (Roth) and tax-deferred accounts to provide greater flexibility and control when managing income taxes over time. The numbers on the chart specify situations in which contributing or converting to a Roth option should be carefully considered.