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Hello, and welcome to Andrew Answers! I'm Andrew. Today's question comes from Eric
this is where the jargon of our industry makes things that should be convenient a little
more difficult.
To put it simply, a Roth provision in your 401(k) plan simply refers to how the tax treatment
goes. For Roth, it's typically after tax. For 401(k)s, it comes out of your paycheck
pre-tax. What's interesting is that since 2006, we've been able to combine the unique
difference between a Roth IRA and a 401(k) plan and put them together. So now, your 401(k)
can actually have a Roth provision, which means you can put money in both pre-tax and
post-tax. This usually differs from plan to plan so if you're interested in pre-tax
or post-tax contributions, always contact your plan sponsor to make sure you understand
how your plan works from beginning to end.
Pretty simple question this week but if you have a question about your retirement plan
or your future, simply comment where you see this video. Or, you can follow me at @AndrewAnswers
on Twitter and ask your question, and maybe your question comes up again on the next episode
of Andrew Answers.
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