Roth 401(k)


A contribution-based retirement account, which combines features of the traditional Roth IRA and 401(k) plan accounts. The Roth 401(k) contains many benefits for employees, such as being able to contribute post-tax money, but many companies do not yet offer this as a retirement plan option, due to the increased amount of work it takes to maintain this plan. Companies were given the option to begin offering this plan in 2006.

Use Roth 401(k) in a sentence

My mom has been contributing to her ROTH 401 since 2006, and will accumulate nearly 40,000, she'll enjoy the benefits of after-tax savings then.

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They decided to use a Roth 401 for the companies retirement plan. It was more work to maintain it, but thought the benefits to the employees were worth it.

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My husband and I plan to change his traditional 401K retirement plan over to a ROTH401 because the amount he has in there will be tax free growth and will not be taxed. Unfortunately his company can't match anything that goes into the Roth 401 but that is okay because the amount of growth that will be tax free will be more beneficial to us at retirement.

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