What is the difference between a Roth IRA and a Roth 401k?
A Roth IRA is a contribution to an account outside of your 401k plan. These accounts are typically established with a mutual fund company, brokerage account or another financial institution. Your contributions are made with post-tax dollars that grow tax deferred. There are limits as to the amount you may contribute. You should also consider your tax filing status and income to determine if you are eligible to make Roth IRA contributions. Distributions can be made at any time, subject to tax and penalty if not a ‘qualified distribution’. A Roth 401k is a contribution made to your company’s retirement plan. It is paid to the plan through salary deferrals with post-tax dollars and grows tax deferred. Whether you direct a portion or all of your salary deferral to pre-tax dollars and/or post-tax dollars, the total limit remains as one dollar limit. Typically you are able to defer more in the Roth 401k than a Roth IRA and there are no income restrictions. Distributions may be made only afte
