Financial expert Suze Orman is making a bold call for retirement savers: switch to a Roth 401(k) or risk missing out on tax-free wealth. In a recent LinkedIn post, Orman called the Roth 401(k) a must-have for anyone serious about building tax-free retirement savings. While 86% of 401(k) plans offer Roth options, fewer than 20% of participants actually use them.

Orman's frustration is palpable as she highlights the stark contrast between availability and adoption. A Roth 401(k) allows contributions with after-tax dollars, meaning withdrawals in retirement are completely tax-free. This differs from traditional 401(k)s where contributions reduce current taxable income but withdrawals are taxed as ordinary income. The Roth option also eliminates required minimum distributions, giving retirees more flexibility with their savings.

The tax advantages extend beyond simple withdrawals. Orman notes that Roth savings can help keep Medicare Part B premiums lower and potentially reduce taxes on Social Security benefits. For those who have spent years building traditional 401(k) balances, Orman recommends shifting new contributions to Roth accounts. "Having money you will not owe any tax on in retirement is going to be a great advantage," she said, urging workers to consider making the switch for 2026 and beyond.