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Investments glossary

Roth 401(k)

A Roth 401(k) is an employer-sponsored investment savings account that is funded with after-tax dollars up to the plan’s contribution limit. This type of investment account is well-suited for people who think they will be in a higher tax bracket in retirement than they are now, as withdrawals are tax free. The traditional 401(k) plan, on the other hand, is funded with pretax money, which results in a tax on future withdrawals.

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