Pre-Tax contributions avoid paying taxes when you put money into your 401(k). Your money then grows tax deferred. However, you will pay income taxes when you pull the money out in retirement. b. Roth contributions go into your 401(k) after taxes have already been paid. Your money then grows tax-free and all that growth can be drawn in retirement tax-free.
Roth VS. Pre-Tax, Sequences of Returns
Tele (k) Summary V3 2020-7-1
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