What is the difference between a traditional 401(k) and a Roth 401(k)?

The basic difference between a Traditional 401(k) and a Roth 401(k) account is the tax treatment. With a Traditional 401(k) account, you make contributions with pre-tax dollars, so you get a tax break upfront, helping to lower your current income tax bill. With a Roth 401(k), it's basically the opposite. You make your contributions with after-tax dollars, meaning there is no upfront tax deduction. However, Roth 401(k) withdrawals of both contributions and earnings are tax-free at age 59 1/2 , if at least 5 years have passed since your first contribution to the Roth account (https://www.irs.gov/retirement-plans/roth-acct-in-your-retirement-plan).

A Roth 401(k) is a component of some 401(k) plans. This is different than a Roth IRA which you can open on your own without an employer. For a Roth IRA, you cannot contribute if you earn above a certain Modified Adjusted Gross Income (MAGI). Check the IRS website for current tax year limits. However, any eligible participant in a 401(k) can contribute to a Roth 401(k) if offered by the plan, regardless of income level.