Roth 401(k)

One of two basic types of employer-provided, tax-advantaged 401(k) savings accounts. In a Roth 401(k) plan, you pay taxes now but benefit from tax-free withdrawals in retirement. If you're early in your career and expect to earn more in the future, you’re typically in a lower tax bracket now, and a Roth 401(k) may be a wise decision. See also: Traditional 401(k).