Like this fine lady to the left, we all want to be splashing around a pool in a funny hat when we retire. But the question of how to get there isn't always simple.

For years now, a 401(k) has been a must for younger workers who have heard the word "pension" but realize it has no significance for their personal futures. A 401(k) is nice, even if not so generous as the older set got (assuming their pensions haven't been ripped out from under them yet): you sock away some money for retirement, you get a tax break for doing so (your reported income to the IRS is your income minus your 401(k) contribution), and maybe your employer even gives you a small amount of free money in the form of a company match. Then you let it sit there, growing tax-free, until you retire, at which time you pay taxes on it. If all goes well, you're set for the rest of your life.

Then they came up with these Roth 401(k)s, just to confuse the situation, and boy do they ever. Here's the deal with these: you contribute today, but there's no tax break, so you're getting taxed on the money you're putting in on this year's tax forms, BUT way out in the distance at retirement time, when you get ready to take that money out, you won't get taxed on it.

So, it comes down to this: pay tax now or pay tax later.

USA Today's Sandra Block had a column on this earlier this week, and she suggested that the Roth 401(k) is good for young workers because they are probably in a lesser tax bracket now then they will be at retirement, so even though they'll get taxed on that money today, it will be at a lower rate.

(By the way, she also mentions that employers haven't fully embraced the Roth 401(k) because it's not a done deal that the government will give it another OK when it comes up for a vote in 2010.)

I'm not sure I buy this argument. First off, one of the appeals of the 401(k) for younger workers is the tax break. They might not be making a lot to begin with and might still have student loans, their first mortgage, etc. So the tax break is like a trade off--"I'll save it if I don't have to pay taxes on it." And, because it's a pre-tax contribution, the 401(k) doesn't take a big bite out of their paychecks.

With the Roth 401(k), they have to take a piece of their after-tax paycheck and put it away for retirement. Everyone should be saving, but if you don't have a lot of money, saying bye-bye to after-tax money until you're 59.5 feels a little more risky, and a bit more uncomfortable.

Second, even if you are in a higher tax bracket when you are older, you're paying taxes on inflationary dollars--I'll gladly pay you 25% on my money in 2046 if I don't have to pay you 15% today, because those dollars I contributed are worth less in the future. It takes a greater economist than me to figure out if I'm on target here, but that's my take.

I don't want to give the impression that I'm against the Roth 401(k). I'm not. If you're a young person who has the margin or simply has the discipline to contribute after-tax to your retirement, it could be a great thing for you. Short-term sacrifice brings greater long-term gain in most instances, provided you can stand the pain today.

But I quibble sometimes with advice for young people about how they should be saving more, etc. They SHOULD be saving more, but so should everybody, and oftentimes older people forget that kids have higher Student Loan bills today and an iffy job market. If I were 24 or 25, I think I'd be using a regular 401(k) and trying to then take a chunk of my after-tax money and putting it in the proverbial "rainy-day" fund. That takes discipline of course, but it gives you a lifeline that's a lot easier to grab on to than the money on a 401(k) statement.

Someone will inevitably say that I'm suggesting young people don't need to worry about saving. That's not what I'm saying. Read it through again if that's your impression.

(Last aside: I have a friend that always refers to it as a 410(k), as in Four-One-Oh-Kay. Drives me crazy.)