How Does Roth 401K Affect Take Home Pay? 
A Roth 401k would be funded with `` after tax '' dollars . Your earnings would have already had taxes deducted prior to funding your Roth 401k . The advantage of a Roth -LRB- vs. traditional 401k -RRB- is your account grows and distributes tax free as long as your contributions have been invested for at least 5 years and you are at least 59 1/2 when distributions begin . A traditional 401k is funded from `` pre-tax '' dollars . Your take home pay will be higher , but you will pay taxes on the money you take out during retirement at what ever your tax rate is at that time . Most people do not have the same level of deductions during their retirement years so you will need to look at your own situation to determine whether a pre-tax or post-tax 401k is best for you . One thing is for sure , if you can afford to pay the taxes now while you are putting money into your Roth 401k , you 'll be thrilled when you pull money out during retirement tax free . 