A Roth 401(k) is a retirement savings plan set up by an employer for qualified employees.
Contributions are deducted from an employee’s check post-tax, meaning after federal and state taxes have been taken out. In some plans, the employer may also contribute by matching up to a certain percent of the employee’s contribution.
The maximum contribution that an employee under 50 can make in 2018 is $18,500. That total includes both their traditional 401(k) contributions and their Roth 401(k) contributions.
If the employee is 50 or older, they may make an additional catch up contribution of $6,000.
A Roth IRA in an individual retirement account. It allows a person to set aside post-tax income up to a specified amount each year. It is not set up through an employer.Updated September 26, 2017
This article provides general information and shouldn’t be construed as legal, benefits, or HR advice. Benefits and insurance regulations may change over time and may vary by location and employer size. So, please consult a licensed broker or appropriately certified expert for advice specific to your business’s benefits options.