|
Pre-tax Contributions |
Roth Contributions |
After-Tax (non-Roth) Contributions |
| When are contributions taxed? |
At time of withdrawal |
At time of contribution |
At time of contribution |
| How do earnings grow? |
Tax-deferred |
Tax-free |
Tax-deferred |
| When are withdrawals taxed? |
Both contributions and earnings are taxed as ordinary income in retirement |
Qualified withdrawals of both contributions and earnings are tax-free |
Only earnings are taxed as ordinary income upon withdrawal;* contributions are tax-free |
| Early Withdrawal Penalties |
10% penalty on distributions made before age 59 ½ |
10% penalty on distributions of investment earnings made before age 59 ½ (or if the account has been held for less than 5 years) |
10% penalty on distributions made before age 59 ½ |
| Contribution Limits |
Subject to annual IRS limits (e.g., $23,500 combined pre-tax & Roth in 2025) |
Subject to the same annual IRS limits as pre-tax contributions |
Allowed after maxing out pre-tax/Roth limits, up to a much higher overall plan cap (e.g., $70,000 total in 2025) |
| Eligible for Company Match? |
Yes, eligible for company match |
Yes, eligible for company match |
No, not eligible for company match |