Definition

A Roth 401(k) takes contributions from after-tax pay, so qualified withdrawals in retirement — including all the growth — are tax-free. It has no income limit, unlike a Roth IRA, and any employer match goes into a pre-tax account. It tends to favor those who expect to be in the same or a higher tax bracket later.

1. Roth vs Traditional IRA: Which Is Right for You?

   The Roth vs Traditional IRA question comes down to one thing: when do you expect to pay a lower tax rate? Here is how to think through it for your specific situation.
   retirement

1. 401(k)

   An employer-sponsored retirement account funded by payroll deductions, often with a company match.
2. Roth IRA

   An individual retirement account funded with after-tax money that grows and is withdrawn tax-free.
3. Employer Match

   Money your employer adds to your 401(k) based on what you contribute.