Types

• Roth accounts are available for several different types of retirement plans, including IRAs, 401ks and 403b accounts. Roth IRAs can only be contributed to if your income is below the annual limits. These limits adjust each year for inflation. Roth 401k plans and Roth 403b plans do not have income limits. However, if your employer does not offer the Roth option, you cannot create a Roth 401k or Roth 403b for yourself.
  
  

Benefits

• Roth accounts benefit people who expect to be in a higher income tax bracket at retirement than they are in the current year because the money can be withdrawn tax-free at retirement. If you are in a lower bracket during the year that you make the contribution, the financial benefits of taking tax-free withdrawals outweigh the benefits of being able to deduct your contributions from your taxes. In addition, Roth IRAs offer the added benefit of the money remaining in the account indefinitely whereas all other retirement accounts are subject to required minimum distributions beginning at age 70 1/2
  
  

Time Frame

• Qualified withdrawals from a Roth account require that you not only be 59 1/2 years old when you take the withdrawal, but also that your account have been open for five tax years. Tax years are counted from January 1 of the tax year you made your first contributions. This is significant because you can make a contribution to a Roth account up to April 15 of the following year. For example, you could make your first withdrawal in the 2010 tax year on April 1, 2011, but the age of the account for withdrawal purposes would be January 1, 2010.
  
  

Rollovers

• Roth accounts are treated differently when it comes to rollover rules because they are after-tax accounts rather than tax-deferred accounts. Roth 401k and Roth 403b plans can only accept direct transfers from another Roth 401k or Roth 403b plan. You cannot roll money from any other account into a Roth 401k or Roth 403b plan. Roth IRA accounts can accept transfers from other accounts. However, if the rollover is coming from a tax-deferred account such as a traditional IRA, 401k or 403b, the money must be included in your taxable income for the year.
  
  

Size

• Roth IRA accounts have much lower annual contribution limits than Roth 403b or Roth 401k plans. As of 2010, the contribution limit for a Roth IRA is $5,000 if you are younger than 50 and $6,000 if you are 50 or older. For Roth 401k and Roth 403b plans, the limit is $16,500 if you are under 50 and $22,000 if you are 50 or older. These limits are subject to change each year based on inflation.