Earlier this year in the GRBJ, Anastasia Wiese, JD, CFP® took on a subject of both interest and confusion to many: the Roth 401(k) Option.

The Roth 401(k) can be a powerful retirement savings vehicle that blends some features from traditional 401(k)s and others from Roth IRAs. Given how similar these account types sound, it’s easy to lose track of their differences. Anastasia’s article provides an approachable overview on the key features of each.

Like a Roth IRA, you contribute to a Roth 401(k) with after-tax dollars. This means, once you qualify to make withdrawals from the account (typically in retirement), the dollars you withdraw are tax-free, whether they come from contributions or earnings.

Like any 401(k), a Roth 401(k) is only available through a company-sponsored retirement plan – and not all retirement plans offer them. If yours does, a notable benefit of the Roth 401(k) is that even high-income earners can contribute to it. That’s in contrast to a Roth IRA, where high-income earners are phased out from making contributions.

This can make the Roth 401(k) an especially attractive option for high-income earners looking to save additional after-tax dollars for retirement.

There is certainly plenty more to cover when understanding how to make best use of all your retirement saving opportunities, including the Roth 401(k). To learn more, we encourage you to read Anastasia’s full GRBJ article, “The Roth 401(k) Option.” And feel free to be in touch if we can tell you more about your own retirement plan options.