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November 28, 2016

How to tell if a Roth 401(k) is right for you

By ARIELLE O'SHEA
NerdWallet

A 401(k) is already one of the best ways to save for retirement, but many plan sponsors now offer one step better: a Roth 401(k).

If you could build the ideal retirement account, this might very well be it. Like a 401(k), there's a high, $18,000 annual contribution limit, or $24,000 for those 50 or older. As with a Roth IRA, you make contributions with after-tax dollars, but qualified distributions are tax-free. If you earn so much that your Roth IRA contribution limit phases out, a Roth 401(k) gives you access to that coveted tax-free growth.


 
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