(Bloomberg Business) — More and more workers have a choice in their retirement plan to put their savings in a traditional 401(k) or a Roth 401(k). The problem: Many people dont know they have this option, and those who do often don’t have any idea which to pick. As a result, very few workers are choosing the Roth 401(k), even though many could benefit from it.
Of the 1,900 employers offering 401(k) plans through Vanguard Group, 56 percent give employees access to a Roth 401(k), up from 42 percent in 2010. Large companies are likeliest to offer Roths, so more than 2.3 million workers in Vanguard plans, almost two-thirds of the total, have access to Roth 401(k)s. But new Vanguard data show just 14% of them are using a Roth, a number that’s slowly risen from 9% in 2010.
