Comparisons between Roth IRA, Roth 401k and Old Traditional 401k Retirement Plans
Effective January 1st, 2006, employers now have the ability to combine the retirement options provided by traditional 401k retirement plans and Roth IRA plans into one effective plan, called simply, the Roth 401k. The Roth 401k is essentially similar to the traditional 401k and Roth IRA plans but differs in some ways as well. Below, we have outlined the main similarities and differences between the three:
Workers who already have a 401k plan can take out
a Roth 401k plan if their employer offers it. However, the total amount
contributions by both the Roth 401k and the traditional 401k plan cannot
exceed $18000 in the year 2015 (or $23,500 for employees over the age
of 50). Participating in both plans means you can select how much money
you want to put into each.