Roth 401(k)

A Roth 401(k) is an employer-sponsored retirement savings account.

Unlike a traditional 401(k), investors don’t receive a tax break when they contribute to a Roth 401(k). While the contributions themselves are subject to income tax, they grow tax-free once added to the Roth 401(k). This account type is suited for investors who would rather pay tax now and have tax-free income in retirement.