What is a Roth 401(k)?
Curious how a Roth 401(k) works and how it may fit into your financial plan?
What is a Roth 401(k)? – The Often Overlooked Retirement Account
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What is a Roth 401(k)? So glad you asked! If you feel navigating your company’s 401(k), SIMPLE IRA, 403(b), 401(a), or any host of other workplace retirement plans is confusing, you’re not alone! Recently, Founder & Senior Wealth Advisor Scott Sturgeon sat down with CNBC to discuss the in’s and out’s of Roth 401(k)’s. Roth 401(k)’s are a unique workplace retirement plan that allow you to make after-tax contributions directly from your paycheck. Once funds are deposited into the account, they can be invested and grow over time without having to pay taxes on that growth. If certain requirements are met, after reaching a certain age, those funds can then be withdrawn from the account tax free, either as a 401(k) or rolled over into a Roth IRA.
While Roth 401(k)’s are not as common as Traditional 401(k)’s, they can be a great addition to an overall financial plan due to their tax-advantaged nature akin to a Roth IRA. While potentially beneficial, there are some nuances to navigating these account types addressed in the article that you may find helpful.
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