This is a good article about the value of using a Roth 401k – which I find are becoming available much more frequently. They are a good idea, but, as with most aspects of financial planning, the best answer for you depends on many factors – that are unique to you.
If your employer now offers a Roth option in your 401(k), it’s a great idea to invest in it, or at least consider investing a portion of your 401(k) contribution in the Roth. Contributions to a Roth 401(k) won’t reduce your tax bill now. While pretax salary goes into a regular 401(k), after-tax money funds the Roth. But as with Roth IRAs, withdrawals from Roth 401(k)s are tax- and penalty-free as long as you’ve had the account for five years and are at least 59½ when you take the money out.
Because there are no income limits on Roth 401(k) contributions, these accounts provide a way for high earners to invest in a Roth without converting a traditional IRA. In 2014, you can contribute up to $17,500 to a Roth 401(k), a traditional 401(k) or a combination of the two. Workers 50 or older can contribute up to $23,000 annually. If you get matching funds from your employer, they go into a traditional pretax 401(k) account.