How does a Roth401(k) differ from a traditional401(k)?

A. Income contributed to a Roth401(k) is taxed at the minimum tax rate at the time of the contribution. The advantage of a Roth401(k) is that funds are not taxed when withdrawn from theaccount, as they are when withdrawn from a traditional401(k) account. Inessence, the Roth401(k) plan allows contributors to avoid paying taxes on theinterest, although they must pay taxes on capital gains generated by the account.

B. Income contributed to a Roth401(k) is not taxed at thecontributor's marginal tax rate at the time of the contribution. The advantage of a Roth401(k) is that funds are taxed when withdrawn from theaccount, in contrast to when withdrawn from a traditional401(k) account. Inessence, the Roth401(k) plan allows contributors to avoid paying taxes on the interest or capital gains generated by the account.

C. Income contributed to a Roth401(k) is taxed at the maximum tax rate at the time of the contribution. The advantage of a Roth401(k) is that funds are not taxed when withdrawn from theaccount, as they are when withdrawn from a traditional401(k) account. Inessence, the Roth401(k) plan allows contributors to pay less in taxes on the interest or capital gains generated by the account.

D. Income contributed to a Roth401(k) is taxed at thecontributor's marginal tax rate at the time of the contribution. The advantage of a Roth401(k) is that funds are not taxed when withdrawn from theaccount, as they are when withdrawn from a traditional401(k) account. Inessence, the Roth401(k) plan allows contributors to avoid paying taxes on the interest or capital gains generated by the account.