Truth 33. Roth 401(k)s

The popularity of the Roth IRA, where you can save for retirement in an account that grows totally tax free, has spawned the latest development in retirement planning, the Roth 401(k). Many people are familiar with conventional 401(k) retirement accounts where an employee is able to contribute some of his salary into a tax-deferred retirement account. Money contributed to a conventional 401(k) account is not subject to income tax at the time that it is invested into the 401(k) account. However, income taxes become due when the money is withdrawn from the account.

Starting in 2006, employers could offer Roth 401(k) accounts that permit employees to put all or some of their 401(k) contributions into a Roth 401(k) ...

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