Roth 401(k) accounts will - with the blessing of the Internal Revenue Service - make their debut effective Jan. 1, 2006.Unlike the 401(k), which is funded with pretax dollars, the Roth 401(k) is funded with after-tax dollars from the employee. Any employer match would remain taxable.

As with Roth IRAs, the gains are tax-free, whereas the gains in a traditional 401(k) are taxed as ordinary income. To qualify for a tax-free withdrawal, the participant must be age 59-1/2, and the Roth account must have been opened at least five years before distribution.

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