Roth 401(k)

A Roth 401(k) is a retirement savings plan offered by employers that combines features of a traditional 401(k) and a Roth IRA. Contributions are made with after-tax dollars, meaning you pay taxes now, not later. The advantage is that when you withdraw funds in retirement, qualified distributions are tax-free, including the earnings. This plan allows for higher contribution limits than a Roth IRA and can be a valuable tool for tax planning, especially if you expect to be in a higher tax bracket in retirement. It’s designed to help you grow tax-free income for your future.