Your Roth 401(k) Is About to Become a Much Better Retirement Plan
Since it first became available in 2006, the Roth 401(k) has been a great plan for saving for your retirement. It allows you to invest after-tax money directly from your paycheck into an account that then grows tax-deferred. Once you reach age 59 1/2 and have had a Roth 401(k) funded for at least five years, you can withdraw your money completely tax-free.
That automatic investing, tax-free withdrawals, and a fairly high annual limit (in 2023, it's $22,500 for people under age 50, and $30,000 for those age 50 and up ) make the Roth 401(k) attractive for savers.
The big downside of a Roth 401(k), however, has traditionally come in retirement. Historically, Roth 401(k)s have been subject to required minimum distributions (RMDs) that force you to take money out of that tax-advantaged plan once you are old enough.
Source Fool.com
