difference between roth 401k and roth ira
By Investopedia AAA |. A: The main difference between a Roth 401(k) plan and Roth individual retirement account (IRA) is that the 401(k) is offered by an employer as a defined contribution pension, while the IRA is sought out by the individual.y Investopedia AAA |. A: The main difference between a Roth 401(k) plan and Roth individual retirement account (IRA) is that the 401(k) is offered by an employer as a defined contribution pension, while the IRA is sought out by the individual.
A Roth 401(k) and a Roth IRA sound similar -- and they are. Contributions are made after taxes and earnings can be taken out tax-free after either five years or at age 59Â½.But the 401(k) version of the Roth has a couple of key differences from its IRA cousin.ontributions are made after taxes and earnings can be taken out tax-free after either five years or at age 59Â½. But the 401(k) version of the Roth has a couple of key differences from its IRA cousin.