Roth 401(k) is a retirement savings plan and it is one of the newest options for employee retirement plan benefits. It is outlined after the Roth IRA (Individual Retirement Account) – qualified distributions are withdrawn tax free and contributions are made from after-tax earnings.One of the advantages of the Roth 401(k) plan is that anyone regardless of their income bracket can contribute to the plan.

With a Roth, married taxpayers filling jointly with AGI (Adjusted Gross Income) less than $167,000, which is slated to be $169,000 in 2011and single taxpayers with AGI less than $105,000 and for 2011 the limit is slated to be $107,000 can make contributions, despite of their involvement in a qualified retirement plan.

Contributions are parted out for particular taxpayers with AGI between $105,000 and $120,000 and for married taxpayers filing jointly with AGI between $167,000 and $177,000. There are no income limitations for contributing to a Roth 401(k).

The contribution limits for Roth 401(k) are the same as for a regular 401(k) plan. It can be split between a Roth and regular 401(k), provided that total contributions do not surpass the maximum, with funds stored in other accounts. Contributions can be made to both a Roth IRA and a 401(k), only if you meet up the income eligibility rules for the Roth IRA.

Annual distributions must be taken after age of 70 ½ with a Roth 401(k). But, funds in this plan can be rolled over to Roth IRA that would not require a distribution. Individuals under definite income levels can switch regular IRA to Roth IRA, on condition that income taxes are paid on the amount that would have been taxable if withdrawn. However, there is no provision to convert regular 401(k) accounts to Roth 401(k).