A Roth 401K is a plan set up for employees with an important difference concerning taxation. 401K plan consulting firms will explain that traditional 401K plan contributions are made with pre-tax dollars (so you save taxes up-front) which accumulate tax-deferred, until distribution. At that time, the withdrawn funds become taxable as ordinary income. Roth 401K consultants will explain that unlike traditional 401K contributions, Roth 401K contributions, are made with after-tax dollars, which accumulate on a tax-free basis and are paid out 100% income tax-free. 401K plans that are designated as Roth 401K plans, provide income tax savings at the end during retirement not as you contribute. Often, the younger you are when you begin a Roth 401K, the greater the advantage over a Traditional 401K plan. Qualified 401K Plan Consultants can show you the mathematical advantage of a Roth 401K plan.