Jump to content

Recommended Posts

Posted

I'm in the process of enrolling in a 401k with trowprice. I'm a bit confused in this enrollment stage (screenshot below). There's the Roth 401k and the Pretax selection. My assumption is that the Pretax is the traditional 401k account? If so, why do they give you the choice of opening both traditional and Roth 401K accounts? 

4B84F04E-5AD5-446E-BC00-A93009F24C38.png

  • david rigby changed the title to T Rowe Price 401k plan
Posted
14 hours ago, csanch11 said:

If so, why do they give you the choice of opening both traditional and Roth 401K accounts? 

You're allowed to have both - you could do, say, 2% to traditional and 2% to Roth.

Ed Snyder

Posted

Roth 401k contributions are generally after-tax but still go into your 401k plan and are subject to the same 401k rules, i.e., contribution limits, withdrawal rules, etc.  The difference is you are paying taxes at the time you contribute versus when you withdrawal (unless you don't meet the withdrawal requirements of holding the account for at least 5 years and being age 59.5 when you withdrawal).

https://www.betterment.com/resources/traditional-or-roth-401k-decide-with-this-401k-calculator/

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

Terms of Use