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Answer: Retirement & Wills, IRAs, IRAs and 401(k)s
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What’s a Roth 401(k)?
A Roth 401(k) is a retirement plan that can be offered by employers. It was allowed starting in 2006. Unlike contributions to a regular 401(k) account, contributions to a Roth 401(k) will not reduce your taxable income this year. But your account will grow tax free, and, assuming you leave the contribution in the account for five years, you can generally withdraw the money tax free after you retire.An important point: You won’t get to contribute more to your plan. The total that can be contributed would remain the same -- $15,500 in 2008 ($20,500 if you are over age 50 or $16,000 in 2009 ($22,000 if you are over age 50). But you can opt to make part or all of their contributions after-tax to get tax-free treatment later. (For more information, check Liz Pulliam Weston’s article "7 hot 401(k) trends.")Return to Questions
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