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Here's the big difference: you contribute after tax income to a Roth 401(k), and when you reach age 59, your withdrawals will be tax free (provided you've had your plan for more than five years). The annual contribution limits are the same as those for a Traditional 401(k) plan.5You can roll Roth 401(k) assets into a Roth IRA when you retire and you don't have to make mandatory withdrawals from a Roth IRA when you turn 70. Many companies with fewer than 500 employees are beginning to take advantage of their benefits.

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