A Roth 401(k) is a retirement plan where employees contribute after-tax dollars. Unlike traditional 401(k)s, withdrawals from Roth 401(k) accounts during retirement are tax-free.
Who can contribute to a Roth 401(k)?
Any eligible employee can contribute to a Roth 401(k) if their employer offers the plan.
What are the advantages of a Roth 401(k)?
The main advantage of a Roth 401(k) is that qualified distributions are tax-free. It also offers tax diversification and flexibility in retirement.