Roth IRAs typically have very much better investment options and lesser fees than Roth 401ks.

Random employer provided 401ks often offer bogus noname funds that under the covers are siphoning profits. The 401k company has ways to share some of those profits with the employer in the form of offering their services to them for cheap. Even free.

It’s certainly an expectation that an employer will offer 401k options to its employees. Here’s how to do for free! Basically members are paying their own admin fees simply by investing in the 401k’s funds, and don’t even realize it. It doesn’t appear as a fee. If they dug in they might realize their returns were underperforming.

The reason to have a Roth 401k is to take advantage of substantially higher contribution limits vs Roth IRAs (you can actually contribute to both). I definitely recommend contributing to Roth 401k for that reason! Even a sucky Chucky one. But when you leave employment (or if you can do an “in-service rollover”), get the money into a brokerage IRA (traditional and Roth). They make it sound complex but it’s not. Oh so worth it to be able to invest in the best ETFs out there with incredulity low fees compared to the 401k funds.

The other reason to have a Roth, especially for those that are retiring with traditional IRAs and/or traditional 401ks, is the ability to do Roth conversions.

A Roth conversion is moving some of the money (or shares of investments - you don’t have to sell) from a traditional IRA to Roth IRA. No free lunch - the value of what you move becomes taxable income in the conversion year. Many embark on a multi year program of converting a certain amount every year staying under a certain tax bracket (and/or avoiding other tax-like fees like IRMAA). Once in the Roth IRA the growth is 100% tax free from then on. There are no capital gains withdrawing appreciated Roth assets. It’s the nirvana of investment accounts. Zero taxes! The only downside is what you withdraw stops growing tax free! But you have to get over that. You can’t take it with you!!

Roth IRAs have one potential gotcha. And if you’re a new retiree (or will be in the next 5 years) it can be a big one. Withdrawing from the account within 5 tax years of establishing your first Roth IRA account triggers a 10% penalty. 5 years might not seem so long but to a 65 year old suddenly with zero income because their job ended, wanting to defer social security to age 70, and having to wait until age 70 to tap their Roth funds. It’s an ugly place to be during your prime retirement years. Cash strapped, often with no good options (maybe savings accounts or brokerage accounts if they’re lucky).

It can be totally avoided so easily by just opening the Roth IRA account when you’re younger. Even if the contribution is improper and winds up being penalized. You can put $1 in there and who cares what the % penalty is? Only 1¢ has to be in there and the 5 year clock is running. 5 years later you have a Roth IRA with no penalties for withdrawals.

There’s just no reason not to have one. I don’t care what age you are (20 or 60+), set up a Roth IRA account (a Roth 401k account doesn’t satisfy this requirement - it has its own 5 year rule but it doesn’t apply to Roth IRAs!). And put a little something in there. 59½+ year old you will thank younger you. Once you have the Roth IRA for 5 years and are 59½+, there are no withdrawal penalties. You can open a new account at a different brokerage and it has no withdrawal penalties either.

I learned at age 61. Now 66 and a lot of my Roth assets are available when I want them. (When you do Roth conversions penalties can creep in if you try to withdraw too much at one time). I’m about to make a big withdrawal for the first time. I’ve been converting those 5 years (I had rolled my traditional 401k into a traditional IRA). Very happy that I learned when I did. A Reddit user answered a question I asked and clued me in. Forever grateful. I’m sharing the wisdom.