At Hill Investment Group, we recognize that when a few clients raise the same question, it’s likely that more have similar thoughts. To better serve you, we’re introducing a new segment in our newsletter where we’ll address common questions and how we approach them. To submit questions for future newsletters, email us at info@hillinvestmentgroup.com.

Hey Hill, Is a Pre-Tax or Roth 401(k) Right for Me?

Picture this: you’ve just landed a new job, and you’re ready to dive into your benefits package. You’re at the 401(k) enrollment screen, wondering: “Pre-tax or Roth contributions—which one’s the better long-term choice?” Many of our clients face this same question, and the answer often depends on your financial goals. Here’s a quick breakdown to help you make an informed choice.  

Pre-Tax vs. Roth: What’s the Difference?

Think of it like shopping with a choice between a discount today or tax-free shopping later.  

• Pre-tax contributions lower your taxable income now, saving you on taxes this year. But you’ll owe taxes on those funds, plus any growth when you withdraw in retirement.
• Roth contributions are taxed upfront, giving you the benefit of tax-free growth and tax-free withdrawals in retirement.

How This Can Look in Dollars:

If you’re in the 24% tax bracket, contributing $10,000 pre-tax saves you $2,400 this year. With Roth, you pay that tax now but enjoy tax-free withdrawals on both the initial amount and any growth in the future.

Key Factors to Consider:

• Current vs. Future Tax Bracket: Are you early in your career and expecting your income to grow? Roth might make sense, letting you lock in today’s lower tax rate. But if you’re in a high-earning phase and expect a lower tax bracket in retirement, pre-tax could be more advantageous.

• Time Horizon:  The longer you have until retirement, the more valuable Roth’s tax-free growth can be. Younger savers often benefit from decades of compounding without a tax hit.

• Employer Match: Don’t forget that any employer match is usually pre-tax, giving you a mix of both types, regardless of your choice.

Need Help Deciding? 

This choice doesn’t have to be overwhelming. If you want help deciding between pre-tax and Roth contributions—or figuring out how much to save and where to invest—reach out. We’re here to help you get clear on what makes sense for your financial future.

Hill Investment Group is a registered investment adviser. Registration of an Investment Advisor does not imply any level of skill or training.  This information is educational and does not intend to make an offer for the sale of any specific securities, investments, or strategies. Consult with a qualified financial adviser before implementing any investment or financial planning strategy.

I’m excited to share some recent news: Besides the television ads we’ve mentioned, I’ve had the privilege of being featured in a recent New York Times advertising campaign by Charles Schwab, celebrating the work of independent financial advisors. The campaign highlights the unique value we bring to our clients by considering their entire lives when managing their financial futures.

When people see the ad, they often ask, “How did you get selected for this?” It’s a good question, and the answer is simple: Schwab invited me to participate. We’re not paid to be in this ad, and we don’t pay anything to be featured. We chose to be involved because we believe wholeheartedly in the power of independent advice.

My quote in the ad says, “Your dreams deserve more personal attention,” and that’s not just a tagline—it’s core to the philosophy that drives us at Hill Investment Group. Unlike the traditional brokerage firms or wirehouses that are often more focused on sales targets, independent advisors are free to prioritize what truly matters: you and your goals. We’re not just managing portfolios; we’re connecting your investments to your big picture, your dreams, and your life.

We’re honored to be part of this campaign because it gives us an opportunity to share the story of independent advice with a broader audience. It’s a story about how personalized, unbiased guidance can make a real difference in people’s lives and how being independent allows us to align our interests with those of our clients.

Being featured in the campaign is not just about recognition; it’s about raising awareness of the benefits of working with independent advisors. It’s about championing a model that puts clients first, free from the conflicts of interest that can come with sales-driven environments. At Hill Investment Group, we’re proud to be part of this community and to show what’s possible when your dreams truly receive the personal attention they deserve.

If you have any questions about what it means to be an independent advisor or how we connect your portfolio to your life, don’t hesitate to reach out. We’re here to help you dream bigger, plan smarter, and live fully.

As we rapidly approach the 8th Birthday of Odds On: The Making of an Evidence-Based Investor, the book (in all its formats) remains as relevant now as it did when it first launched in 2016. This is a testament to the timelessness of the Taking the Long View investment strategy.

Thousands of people have been exposed to a “new” way of investing, while many others have reaffirmed their beliefs in evidence-based investing. It is the best investment strategy when you take the long view and don’t try to gamble your life savings by timing the market, hitching yourself to a “guru,” or thinking that the “Magnificent 7” is an entertaining cocktail party topic but not the way to build and maintain wealth.

Many clients and friends of the firm, as well as our team members, have gifted Odds On in both its traditional hardback format as well as the audio version that Matt Hall reads to his listeners; however, some folks continue to ask for an “Executive Summary” or a shortcut to taking the long view. Here, we answer that wish with a two-page summary with key takeaways that we hope propels readers to read or listen to the entire “real thing.”

Virtually everyone who gifts Odds On is simply trying to help a friend or family member invest to maximize the odds of success. It’s great to pass on to younger family members, friends, and others who are curious about the path you’ve chosen as an investor and provides a fast and simple way for you to help those close to you.

Obviously, we’re ready to send each of these folks the book or audiobook, too, but this can satisfy an immediate need. For those who are ready, let’s schedule a time to talk by clicking this link.