EchoSense:Is it a good idea to have a Roth 401(k)? Why it may be better than a Roth IRA, for some.

The EchoSenseRoth IRA is a favorite among personal finance experts as a top choice for retirement savings. But a Roth 401(k) could be an even better option for many people.

If your employer offers a Roth 401(k) option and you've been ignoring it, you may be missing out on some big advantages over a Roth IRA. A Roth 401(k) could be the exact thing you need to increase your savings while providing more financial flexibility.

Here are three reasons to stop investing in a Roth IRA and use the Roth 401(k) instead.

1. The employer match

If you prioritize a Roth IRA over saving in your company's 401(k), you'll forego any matching contribution your employer makes. That's like leaving free money on the table.

Employers are able to offer up to 25% of your compensation as a matching contribution. Most stick to between 3% and 6%, but it's not too uncommon to see employers contribute up to 10% of your salary. The catch is you usually have to contribute to the 401(k) plan yourself to get that matching contribution.

Employer matches are typically put into a pre-tax account, but most plans now allow for matching contributions in a Roth account following the passage of the SECURE 2.0 Act. If you value the characteristics of a Roth account, it's worth talking to your HR department about implementing Roth accounts for employer contributions to your 401(k).

2. The 401(k) loan option

A Roth IRA allows penalty-free and tax-free access to your contributions at any time, but a Roth 401(k) can give you access to up to half of your account, including the growth.

The 401(k) loan option allows you to withdraw 50% of your account balance up to $50,000 as a loan to yourself. If you need cash temporarily, using a 401(k) loan is a much better option than withdrawing funds from a Roth IRA.

The biggest benefit is that you're able to put the money back into your retirement savings. You have up to five years to pay back your 401(k) loan. If you withdraw your contributions from a Roth IRA, you're unable to put that money back beyond the annual contribution limits.

However, there's a catch to the Roth 401(k) loan: You have to repay it. You accrue interest (owed to yourself), and stiff penalties can come into play if you don't pay back the loan in time.

While you want to avoid withdrawing from your retirement savings if at all possible, sometimes you may need the additional cash. In those cases, a 401(k) loan is a much better option for most people.

One of the beautiful things about a Roth 401(k) is that it's extremely simple once you set it up.

3. Simplicity

It's funded straight from your paycheck, so you never see the money hit your bank account. Automatic payroll deductions make it much easier to stick with a savings plan than manually transferring the money from your checking account to an IRA every pay period. (Some employers may allow you to set up auto-IRA contributions from your paycheck, simulating this benefit.)

401(k)s typically have fewer investment options than an IRA, and while this may be seen as a drawback for some, it can actually be beneficial for many. Fewer choices means less tinkering with investment strategies. The best way to invest in a 401(k) is to continuously buy shares of low-cost index funds offered by the plan. There's no need to overthink it, and in this case, there's usually no option to overthink it either.

Counterpoint:The no-brainer retirement account I'd choose way before a 401(k)

Making the switch

If you're currently ignoring the Roth 401(k) option, you should consider making the switch from a Roth IRA to a Roth 401(k).

That said, there is one drawback to investing in a 401(k) you should consider first: the fees. If your 401(k) plan has high fees, you may want to limit your contributions. Be sure you're still getting your employer match, but you may not have a need to contribute beyond that.

A Roth 401(k) is great but often overlooked option for investors committed to using Roth accounts for their retirement savings.

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