What is the difference between a Traditional 401(k) and a Roth 401(k)?

With a traditional 401(k), your contributions are made on a pre-tax basis and are not taxed until you withdraw your assets. With a Roth 401(k), your deferrals are made after you pay taxes on the contribution. This means that when you withdraw your assets from the plan, you don't pay any additional taxes on either the principal or earnings. You can choose to defer in either pre-tax and Roth dollars, or both at the same time!