It depends on your situation.
401(k) contributions and earnings are tax deferred, meaning you will eventually pay tax when you withdraw the money.
Like IRAs, 401(k)s are subject to required minimum distribution rules, meaning you will have to start withdrawing money after you reach age 72. The more money you have in your retirement accounts, the larger your RMD will be. It’s possible you will pay more tax by building up your 401(k) than you would pay if you put less money in your 401(k) and reported more income each year.
Retirement Topics — Required Minimum Distributions (RMDs)
Additionally, Congress is considering raising the RMD age to 75. This may or may not happen, further complicating retirement planning.
Retirement rule changes: 3 things Congress is considering
Roth IRAs don’t have RMD rules. You may come out better by maxing out your Roth contribution instead of maxing out your 401(k). Or converting some of your 401(k) money to a Roth before you hit RMD.
Three Ways to Minimize Required Minimum Distributions
I suggest speaking with a financial planner or retirement specialist.
