
A. Please see below a quick and dirty comparisons between Roth 401K, Roth IRA, and Traditional 401K.
Roth 401KEmployee contributions are made with after-tax dollars. Investment growth accumulates without any tax consequences, ever. No income limitation to participate. There is contribution limit each year. Withdrawals of contributions and investment growth are not taxed provided recipient is at least age 59.5 and the account is held for at least 5 years. Distributions must begin no later than age 70.5. | Roth IRASame as Roth 401K. Same as Roth 401K. There is income limitation that varies by year and marriage status. There is contribution limit (much less than Roth 401K). Same as Roth 401K. No requirement to start taking distribution. | Traditional 401KEmployee contributions are made with before-tax dollars. Investment growth is not subject to Federal and most State income axes until funds are withdrawn. Same as Roth 401K, no income limitation to participation. Same as Roth 401K. Withdrawals of contributions and investment growth are subject to Federal and most State income taxes. Same as Roth 401K. |