A:

Roth 401(k) plans are typically matched by employers at the same rate as they match traditional 401(k) plans. Some employers do not offer Roth 401(k) plans.

A Roth 401(k) is an employer-sponsored investment account that is similar to a traditional 401(k) plan in almost every way, except that the contributions to the account are taxed up-front rather than at the time of withdrawal. In a traditional 401(k), you pay taxes at the time the funds are withdrawn, which means you pay taxes on both your initial investment and your investment returns. The Roth 401(k) prevents you from being taxed on your investment returns at the time of withdrawal, as long as the withdrawal happens after you are 59½ years old.

If an employer matches a traditional 401(k) plan contribution, it is standard for it to match one for a Roth 401(k). Unlike the employee's contribution, however, the employer's contribution is placed into a traditional 401(k) plan, and it is taxable upon withdrawal. Many employers have found the additional administrative demands of offering the Roth 401(k) outweigh the benefits to their employees and therefore do not offer one. This is the reason for the perception that employers cannot provide a match to Roth 401(k) employee contributions, when in reality, they are simply not providing the option for the plan at all.

It is important to note that a traditional 401(k) plan can be rolled into a Roth (401)k plan. Once funds from any source are in the Roth (401)k plan, they cannot be moved into a traditional 401(k) plan, however.

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