Your personality can make a difference when choosing a Roth or traditional IRA or 401(k).

When you think about making a financial decision, you might imagine poring over a spreadsheet or crunching numbers on a calculator. But you might be better off with a mirror than an abacus. That’s because making smart choices about money requires more than just math: Understanding your “financial personality” can go a long way toward helping you make better decisions. Are you a big spender or a dedicated saver? Do you use up all your disposable income or do you always manage to put something away for a rainy day? Your answers could make some ways of saving for retirement far more effective for you than others.

What shapes your financial personality? Financial literacy—that is, how much you know—is just one factor, according to Eric Gold, vice president of behavioral economics at Fidelity. “For most people, spending, saving, and investing are a combination of their rational understanding of the topics and their emotional and psychological relationship with money.”

Some people manage their finances like a tight ship. These highly motivated savers tend to be very organized, disciplined, and methodical about their finances and are generally better about putting money away, notes Gold. One reason is they have good “future time perspective,” which helps them see the value of waiting for something rather than insisting on immediate gratification. But for everyone who approaches money with this kind of rigor, there are plenty of other folks out there who are more impulsive, place a greater value on enjoying their money in the here and now, or struggle to stick to their budget. “Most of us are more impatient and want quick rewards,” says Gold.

To see how financial personality can dictate better ways to save, take a look at the following case study. Using hypothetical investors, this study illustrates how some personality factors may determine whether it’s better to save in a Roth (after-tax) or traditional IRA, 401(k), or 403(b) (pretax).

Personal implications: Roth or traditional?

Conventional wisdom tells you to consider your tax rate today and in retirement to help determine whether making Roth or traditional pretax contributions to a 401(k) or IRA would make more sense. But tax rates don’t tell the whole story. Personality could also be a consideration. “Your propensity to spend or save your disposable income could also play a role in which type of account may better help you prepare for retirement,” says Matthew Kenigsberg, senior quantitative analyst at Fidelity.

Here’s why: Generally, contributions to a traditional IRA, 401(k), or other workplace savings account can help lower your taxable income if certain requirements are met. But any money you save on taxes can help you improve your retirement readiness only if you’re disciplined enough to put your tax savings back into your retirement plan. If you get a refund and go out and spend it, it’s not going to help you be ready for retirement.

With Roth contributions—to an IRA or 401(k)—you have to pay taxes on your contributions up front. That takes away from your disposable income. With a Roth 401(k) your contributions and your taxes are coming out of your paycheck each pay period. With a Roth IRA, your contributions come from after-tax savings. But, if you’re like most people, who tend to spend what they earn anyway, having less disposable income might be a good thing when it comes to your retirement savings. You’ve already paid your taxes, so you get to take your money out tax free,1 which could leave you more to spend in retirement. In a sense, says Kenigsberg, “a Roth 401(k) forces you to save more for later by keeping less in your pocket now.”