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 2019 is $19,000. 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. In 2019, it’s a $6,000 contribution maximum, with an additional $1,000 allowed for those 50 or older.
Roth IRAs are not set up through an employer.