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Some companies and organizations with traditional retirement savings plans like 401(k)s and 403(b)s also offer a Roth option for these plans. As with a Roth IRA, a Roth 401(k) or Roth 403(b) enables participants to contribute money on an after-tax basis into an account that allows for tax-free compounding of investment returns and tax-free withdrawals after age 59½. Self-employed people also can consider a similar account, known as the individual Roth 401(k). The contribution limits to these Roth accounts are the same as for the regular versions.

So, why might you want to contribute to a Roth 401(k), Roth 403(b) or individual Roth 401(k)? You may currently be in a relatively low tax bracket and won’t save much on current taxes by contributing to a traditional retirement account that offers upfront tax breaks but does tax withdrawals. This could be the case for someone new to the workforce and early in his career. Thanks to the Tax Cuts and Jobs Act, which took effect in 2018, federal income tax rates are relatively low in the United States now.

Those who are later in their careers might also consider these accounts if looking ahead to their retirement years; they are likely to be in a high or higher tax bracket. This might be the case for folks who have accumulated significant balances in tax-deferred retirement accounts.

If you can’t deduct your contribution to a standard IRA account or find yourself in a relatively low bracket currently, consider making a contribution to a non-deductible IRA account called the Roth IRA. Single taxpayers with an AGI less than $124,000 and joint filers with an AGI less than $196,000 can contribute up to $6,000 per year to a Roth IRA. Those age 50 and older can contribute $7,000. Although the contribution isn’t deductible, earnings inside the account are shielded from taxes, and, unlike a standard IRA, qualified withdrawals from the account are free from income tax.