A Roth 401(k) is an employer-sponsored retirement savings plan that allows employees to contribute after-tax dollars. Qualified withdrawals in retirement, including both contributions and earnings, are tax-free.

The primary difference is in taxation. Contributions to a Roth 401(k) are made with after-tax dollars, and withdrawals in retirement are tax-free. In contrast, traditional 401(k) contributions are made pre-tax, and withdrawals are taxed as ordinary income.

No, there are no income limits for contributing to a Roth 401(k). Unlike a Roth IRA, eligibility to contribute to a Roth 401(k) is not restricted by income levels.

Yes, many employers offer both options, and you can contribute to both. However, the total contribution to both accounts cannot exceed the annual IRS limit.

To make qualified tax-free withdrawals from a Roth 401(k), you must be at least 59½ years old and the account must have been open for at least five years. Early withdrawals may be subject to taxes and penalties on earnings.

It depends on your current tax situation and expected tax rate in retirement. If you expect your tax rate to be higher in retirement, a Roth 401(k) might be better. If you expect a lower tax rate in retirement, a traditional 401(k) could be more beneficial.

If you change jobs, you can leave the Roth 401(k) with your former employer, roll it over to your new employer’s Roth 401(k) (if available), or roll it into a Roth IRA.