The Roth 401(k) retirement plan, which was introduced in 2006, allows you to make after-tax contributions to your account.
Earnings may be withdrawn tax free, provided that you are at least 59 1/2 and your account has been open five years or more.
Both the Roth 401(k) and the traditional 401(k) have the same contribution limits and distribution requirements. You can add no more than the annual federal limit each year, and you must begin taking required minimum distributions (RMD) by April 1 of the year following the year you reach age 70 1/2. You can postpone RMDs if you are still working.
You may not move assets between traditional and Roth 401(k) accounts, though you may be able to split your annual contribution between the two. If you leave your job or retire, you can roll Roth 401(k) assets into a Roth IRA, just as you can roll traditional 401(k) assets into a traditional IRA.
Most 401(k) plans, including the Roth, are self-directed, which means you must choose specific investments from among those offered through the plan.
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