Is 401K Money Tax Free? 
That is a great question ! In any retirement vehicle the money in it will be taxed at some point . In a deferred vehicle like a 401k , the contributions that fund it are made before taxes are taken out . As a result , once the money begins to be withdrawn , the Government collects the tax on those contributions , and any growth that has occurred on that money . This works out well if you 've moved into a lower tax bracket than you were in when making the contributions . A good retirement plan will balance out that tax loss by including a tax free vehicle like a Roth IRA -LRB- the contributions that fund it are taxed going in , so tax free when withdrawn -RRB- or a similar investment . Talk to a trusted adviser , and see what might work best for you , okay ? Thanks for asking ! 