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Whats the difference between a Roth 401k and traditional 401k pre-tax deferral plan?

April 26, 2017deferral difference Plan pre-tax Roth traditional

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Whats the difference between a Roth 401k and traditional 401k pre-tax deferral plan?

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In a traditional 401k plan, annual contributions are made with pre-tax dollars (meaning BEFORE taxes have been paid). On the other hand, a Roth 401k plan requires annual contributions to be made with AFTER-tax dollars (after taxes have been paid).