Which of the following statements about Roth 401(k)plans is true?
I.Contributions to a Roth 401(k)plan are made with before-tax dollars.
II.Qualified distributions from a Roth 401(k)are received income-tax free.

Question

Quizplus · Accepted Answer

Statement I is false. Contributions to a Roth 401(k) plan are made with after-tax dollars, meaning the money has already been taxed. Statement II is true. Qualified distributions from a Roth 401(k) are received income-tax free, which means that you don't have to pay income tax on the money as you withdraw it.

Which of the Following Statements About Roth 401(k)plans Is True