Patrick Anderson – President of UniFirst Financial and Tax Consultants

Most people pick retirement accounts based on habit. That can get expensive.

“The wrong mix can cost you 20–40% of your retirement income to taxes over time.” Not because you did anything wrong. Because you didn’t plan for when taxes hit.

This guide keeps it simple. And practical for 2026.

The Core Difference (It’s One Sentence)

Traditional 401(k): tax break now, taxes later.
Tax‑free (Roth): taxes now, tax‑free later.

Everything else is strategy.

Traditional 401(k): Strong Today, Taxable Tomorrow

Why people love it

• Contributions are typically pre‑tax, so taxable income drops now.
• Money grows tax‑deferred.
• Employer match can be a big boost.

2026 basics

• Employee contribution limit: $23,500
• Catch‑up (age 50+): $7,500
• Employer match: varies (but it’s still “free money”)

When it often makes sense

Traditional can be the right move if:

• You’re in a high tax bracket today
• You expect a lower bracket later
• You want immediate tax relief
• Your employer offers a meaningful match

The tradeoff: withdrawals are taxed as ordinary income. And Required Minimum Distributions (RMDs) can force taxable withdrawals later.

Roth / Tax‑Free Accounts: Pay Once, Potentially Never Again

Why people choose it

• Contributions are after‑tax (no immediate deduction).
• Growth and qualified withdrawals can be tax‑free.
• Roth IRAs have no RMDs for the original owner.

2026 basics

• Roth IRA limit: $7,000
• Roth 401(k) limit: $23,500
• Roth IRA income phase‑outs: begin at $150,000 (single) / $236,000 (married filing jointly)

When it often makes sense

Roth can be a strong fit if:

• You believe taxes will be higher later
• You want tax flexibility in retirement
• You’re building a plan that supports legacy and wealth transfer
• You want more predictable retirement income

2026 Planning Reality: Taxes May Change

2026 matters because several provisions of the 2017 Tax Cuts and Jobs Act are scheduled to sunset at the end of the current law period. That creates uncertainty around future brackets.

“Paying taxes at today’s known rates can be a smart defensive move.” Not always. But often.

“The plans of the diligent lead to profit as surely as haste leads to poverty.” — Proverbs 21:5

The Smarter Move for Many Families: A Hybrid Strategy

This is how many disciplined savers build flexibility:

1. Capture the employer match in a traditional 401(k). Don’t leave it on the table.
2. Add Roth savings (Roth IRA if eligible, or Roth 401(k)).
3. Adjust the mix annually based on income, deductions, and business cash flow.

Result: you create multiple “tax buckets,” so you’re not trapped paying taxes from only one source later.

Common Mistakes to Avoid

• Copying a coworker’s setup. Your bracket, business income, and timeline are different.
• Ignoring state taxes. Where you retire can change the math.
• Forgetting RMD pressure. Large pre‑tax balances can trigger bigger taxable withdrawals later.
• Missing planning opportunities for business owners. Your retirement options can be broader than you think.

How UniFirst Financial and Tax Consultants Helps (Unlike Generic Advice)

We build retirement strategies inside a bigger tax plan—because retirement accounts don’t exist in a vacuum.

“Our clients commonly target ~50% tax reduction almost 100% of the time using proven strategies—unlike those offered anywhere else in the financial industry.” The goal is simple: keep more of what you earn and turn savings into retirement income you can actually use.

If you want clarity, we’ll walk through:

• which accounts you’re using now
• what your future tax exposure looks like
• how to build income for life with a more tax‑efficient plan

No obligation. Just clear next steps.

Schedule your free consultation.

UniFirst Financial and Tax Consultants
205 Van Buren St., Suite 120, Herndon VA 20170
(888) 581-3320 | patrick@unifirstfinancial.com
https://unifirstfinancial.com