Should You Invest In A Roth 401(K)?

Recently BusinessWeek had a quiz on this subject. As more and more employers are offering this option - this set of questions can provide some guidance when picking the Roth option.

Pay tax now - Regular 401(k) contribution is pretax whereas Roth 401(K) is after tax. If you need the money now then regular 401(K) may be the way to go.

Grow your account over time - In a Roth account your money grows tax free and there are no taxes when you withdraw. If you expect substantial earnings over a long period of time then Roth is the answer.

Withdrawing your money - Roth can be converted into an IRA thereby giving you an option to withdraw money later than the mandatory withdrawl age of 70^1/2.

Pay tax later - Consider your tax bracket post retirement. A higher tax bracket means Roth may be a better option since withdrawl from a Roth will be tax free.

References:
Business Week Quiz - Should You Switch to a Roth IRA?
Fool.com - 401(K) Center
Business Week - How to Make the Most of Your 401(K)

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