A Roth 401(k) is a retirement account where investments can grow tax-free. Deposits are taxed as income and withdrawals are tax-free.

• pros
  • capital gains do not incur tax
  • protected from creditors
  • employer may match contributions
    • may exceed soft limit, but not hard limit
  • principal can be withdrawn at any time
  • you can designate charities as beneficiaries and the amount designated does not incur tax and is subtracted from your estate
  • can convert part or all of roth 401(k) to a Roth IRA
• cons
  • income limit
    • can circumvent with Backdoor Roth IRA
  • 10% penalty when withdrawing before 59.5 years old