401k Roth question

Roth 401k you put in after-tax dollars and you are able to take the money out at ~60 without paying taxes on gains

401k you put in before tax dollars and you are taxed when you take the money out.

I understand that much. But how does an employee 401k roth function as opposed to a 401k or a regular roth ira?

thanks man

quote:

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In reality, having both a Roth and non-Roth would let you balance your tax liability in retirement.

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I did this and split 50/50. I can't predict the future and figured walking the line would be my best bet.

Any match that the company offers has to go to a traditional 401k correct? Only your contribution will go into the roth side.

Please correct me if I'm wrong.

With a traditional IRA or 401(k), you can deduct the money you put in from your income before you pay taxes. However, you pay tax on what you withdraw after you retire.

With a Roth IRA or 401(k), you cannot deduct your contributions from income. However, what you withdraw after retirement is completely tax-free.

An added benefit of the Roth IRA (I don't know if this applies to the Roth 401) is that you can withdraw funds from the Roth IRA up to the amount you've contributed with no penalties whatsoever. The IRS doesn't care b/c you already paid your taxes. This removes the need to set aside money for an emergency fund in a taxable savings account - just plow it all into a Roth IRA.

Another little feature is that because the returns on a Roth account are not taxed, you should make your more risky investments there. If your retirement planning is such that you should have some emerging market stocks, for example, it's probably better to do it in your Roth than in a traditional plan.