What Is a Roth 401(k)?

What Is a Roth 401(k)?

Ever heard of a Roth 401(k)? Would one be right for you?

While many people are familiar with the benefits of a traditional 401(k) plans, others are not as acquainted with Roth 401(k).

Since January 1, 2006, employers have been allowed to offer workers access to Roth 401(k) plans.¹ And some have rolled out offerings as part of their retirement programs.

As the name implies, Roth 401(k) plans combine features of traditional 401(k) plans with those of a Roth IRA.2,3

With a Roth 401(k),contributions are made with after-tax dollars—there is no tax deduction on the front end—but qualifying withdrawals are not subject to income taxes. Any capital appreciation in the Roth 401(k) also is not subject to income taxes.

What to Choose?

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Orchestrating Your Retirement Accounts

Orchestrating Your Retirement Accounts

An orchestra is merely a collection of instruments, each of which brings a unique sound. It is only when a conductor leads them that they create the beautiful music imagined by the composer.

The same can be said about your retirement strategy.

The typical retirement strategy is built on the pillars of your 401(k) plan, your IRA, and taxable savings. Getting the instruments of your retirement to work in concert has the potential to go far in realizing the retirement you imagine.

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