What is a Roth 401k?

A Roth 401k account is simply a 401k account with a Roth component. For most purposes, it is treated like a 401k account that you are likely to have with your employer.

Similar to your typical 401k account, contributions to a Roth 401k account fall under these restrictions:

• You are limited to $15,000 in yearly contributions in 2006, $15,500 in 2007, and adjusted according to cost of living thereafter.
  
• If you are 50 years of age or older, you may contribute an additional $5,000 per year. This is known as the "catch up" clause allowing older workers tax shelter additional savings for retirement purposes.
  
• You must begin taking the "minimum required distribution" by age 70 1/2.