Why this is correct (Q12 — Roth 401(k) characteristics): A Roth 401(k) blends the workplace plan structure with Roth tax treatment. The defining tax characteristic of Roth-style accounts is that contributions are made with after-tax dollars; because you’ve already paid income tax on the contributed money, qualified distributions in retirement are tax-free (subject to plan-specific holding periods and rules). The Roth 401(k) keeps the employer-sponsored plan mechanics—payroll withholding, higher contribution caps than IRAs in many regimes, and employer match mechanics—while offering the Roth tax-timing option. It’s crucial to note that while employee contributions to the Roth portion are after-tax, employer matches are usually contributed on a pre-tax basis unless the plan explicitly states otherwise; those matches remain tax-deferred and will be taxed on distribution. Practically, a Roth 401(k) is attractive to people who prefer certainty about future tax-free withdrawals or who expect to be in an equal or higher tax bracket in retirement.

Practical takeaway & steps to consider: If your plan offers a Roth option, decide whether to split contributions between pre-tax and Roth depending on your current tax situation and expected future rates. Use Roth contributions to create a source of tax-free withdrawals in retirement, which can give flexibility for tax planning (for example, managing taxable income in years with RMDs). Confirm how your plan handles employer matches and understand whether conversions/rollovers are possible (Roth 401(k) balances can often be rolled into a Roth IRA, which may affect future RMD treatment). Because Roth contributions reduce current take-home pay differently than pre-tax contributions, run payroll scenarios so you understand the immediate cash-flow impact.