Roth 401(k) vs. Roth IRA

August 29, 2023 Beginner

Three reasons to consider contributing to a Roth 401(k), if available.

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According to the Plan Sponsor Council of America, Roth 401(k)s are now permitted for nearly 90% of retirement plans. If your employer is among them, you may be wondering how a Roth 401(k) differs from a Roth IRA.

¹Account holder must be 59½ or older and have owned the account for at least five years.

²You may choose to split your contributions between Roth and traditional 401(k)s, but your combined contributions can't exceed the limits. For 2025 those age 60 to 63 can make a catchup contribution of $11,250.

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