Why would a roth 401(k) investment plan allow you to invest the most amount of money? a. the federal government subsidizes a portion of a roth 401(k) to people in lower tax brackets save for retirement. b. roth 401(k) plans are reserved for administrators and executives, who have a higher income which would allow them to invest more. c. a roth 401(k) plan takes money after tax has been removed from gross income, and has a contribution limit, but withdrawal is tax free. d. the contribution limit of a roth 401(k) plan is more than double the limit of the traditional 401(k).

ANSWER - OPTION C.

The major advantage that Roth 401(k) investment plan has over its traditional counterpart is that it allows for the contribution of after-tax dollars, that is, the money is taken after the tax has been deducted from the gross income. Additionally, although there is a contribution limit, withdrawal is tax-free if the Roth 401(k) contributions has been held for a minimum of five years.

Why would a Roth 401(k) investment plan allow you to invest the most amount of money? A Roth 401(k) plan takes money after tax has been removed from gross income, and has a contribution limit, but withdrawal is tax-free.   One of the main benefit and reason why people chose to invest in a Roth 401(k) is because your dollar contributions are taken out pre-tax. This allows for a higher percentage of your income to be placed in a savings and also allows you to retain more of your gross income. As long as you have had your Roth 401(k) for a set amount of years, you are able to withdraw funds tax free as well. There are set contribution amounts so that someone can not put an entire income into their Roth however, some employers will match their employees amount. 

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