Here's a good question for mid- and late-career workers: Do your traditional 401(k) or IRA accounts hold a large portion of your retirement savings?

If the answer is yes, consider changes.

While these accounts have advantages, they also have drawbacks that could limit flexibility and raise taxes later on. Smart planning now could reduce future trouble, as long as you're careful.

A lot of affluent workers have outsize traditional IRAs and 401(k)s because they had no access to other tax-favored accounts, like Roth 401(k)s, when they were younger. Meanwhile, contributions to traditional accounts were often tax-deductible and came with a company match. So these accounts seemed-and often were-a better way to save for retirement than a taxable brokerage account.

For such reasons, the dollars in traditional IRAs now far surpass those in Roth IRAs. At the end of 2025, traditional IRAs held about $15 trillion while Roth IRAs held about $2 trillion, according to IRS data and estimates by the Investment Company Institute. (Traditional and Roth IRAs often hold savings rolled over from 401(k) plans.)

Advisers see the imbalance frequently. "When people seek retirement advice, it's often because their traditional IRAs are disproportionately large," says Ed Slott, a CPA who specializes in retirement tax planning.

But there's a big drawback to saving mainly in traditional IRAs and 401(k)s: required withdrawals.

These begin at 3.77% of the account for the year the saver turns 73 and rise from there-whether someone wants the money or not. The distributions are taxed at ordinary-income rates, not the lower ones for long-term capital gains.

By boosting income, these withdrawals can reduce tax breaks and trigger tax increases based on income.

Here's a simplified example. John and Mary, who are in their mid-70s, have traditional IRA assets of $3.5 million and total income of $260,000. That includes $140,000 of required withdrawals that they don't need all of.

As a result, they owe higher Medicare income-based Irmaa premiums; they won't get $12,000 of senior deductions enacted last year; and they'll owe the 3.8% surtax on part of their investment income, among other things. This will continue.

If this couple had more savings that didn't require withdrawals-such as Roth 401(k)s and IRAs or taxable accounts-they would have more flexibility and perhaps lower taxes.

To avoid such a predicament, mid- and late-career workers might think first of saving in a Roth 401(k) or IRA rather than traditional retirement vehicles. But that often means forgoing tax deductions for traditional 401(k)/IRA contributions.

"Couples in peak earning years shouldn't rush into Roth 401(k) and IRA additions or conversions, because the tax rate at that point is usually too high for Roth contributions to make sense," says Edward McQuarrie, a professor emeritus at Santa Clara University who studies retirement strategies.

Roth contributions are in after-tax dollars, so it's important for the saver's tax rate on them to be lower than the expected rate on withdrawals from traditional 401(k)s or IRAs.

That's unlikely when the saver is in peak earning years, unless tax rates rise a lot. Instead, McQuarrie suggests using a taxable brokerage account for some retirement savings.

Here are options for mid- and late-career savers to consider.

Stay the course with traditional 401(k)s and IRAs

Do you think your retirement withdrawals will be taxed at a rate lower than your current one? Then the best move is likely to keep contributing to a traditional 401(k) up to the limit to get the tax deductions.

For 2026 the limit is $24,500 for workers who made more than $150,000 in 2025, because the "catch up" contribution for those age 50 and older often must go to a Roth 401(k). If you want to save more, consider a Roth 401(k) or taxable account. And if a saver has low-income years before required withdrawals kick in, say after retirement, Roth conversions could make sense then.

The drawbacks of traditional IRAs and 401(k)s include required withdrawals as discussed above, and many savers' inability to avoid penalties on withdrawals, or even to access funds.

Go Roth-or don't

Do you think your retirement-account withdrawals will be taxed at a higher rate than your current one? Then consider adding retirement funds to Roth 401(k)s/IRAs. The contributions are in after-tax dollars, but withdrawals are typically tax-free and aren't required for the owner or spouse.

Caveat: As McQuarrie notes, substituting Roth 401(k) and IRA contributions for deductible contributions to a traditional 401(k)/IRA is seldom smart for people in peak earning years. This can be especially unwise if the saver is selling taxable assets to fund the Roth contributions, he adds.

Also remember that Roth 401(k)s are inflexible. For example, Roth IRA rules allow savers to withdraw contributions without tax or penalty, but company Roth 401(k)s plans only allow limited withdrawals. And employees typically can't roll over a Roth 401(k) into a Roth IRA until they're 591/2 or leave the company.

McQuarrie advises savers who want more in Roth accounts to put them in a mega-backdoor Roth 401(k) after getting the maximum deduction for a traditional 401(k) or IRA.

Boost savings in taxable accounts

As an alternative to putting extra savings in Roth accounts, consider a taxable brokerage account.

Dollars going in are after-tax, but the principal can grow tax-free until it's sold. At that point, the investor's tax rate on long-term capital gains will likely be lower than his or her rate on ordinary income. This rate could be as low as 0% or as high as 23.8%, but many taxpayers will owe 15%.

Yes, there will be annual taxes on distributions like dividends-but investments such as low-fee, exchange-traded funds tend to have low distributions.

Taxable accounts are also far more flexible than 401(k)s and IRAs. There are no forced withdrawals and no penalties for early payouts. If you hold the investment until death, no capital-gains taxes are due-at least under current law.