What are the differences between a Roth 401k and a traditional before-tax 401k?

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2026-07-20 13:21

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The main difference between a Roth 401k and a traditional before-tax 401k is how they are taxed. With a Roth 401k, contributions are made after taxes, so withdrawals in retirement are tax-free. In contrast, traditional before-tax 401k contributions are made pre-tax, so withdrawals in retirement are taxed as ordinary income.

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