Roth IRAs vs Roth 401(k)

To continue a previous discussion from several days ago, I wanted to briefly cover Roths again and, specifically, the difference between the Roth 401(k) and the Roth IRA.  As a warning, this is not an exhaustive list but I just wanted to hit the high points.  

• Income limit: Roth IRA's are subject to an income limit ($183,000 for married folks and $116,000 for singles to be able to make the full contribution amount), whereas Roth 401(k)'s are not. 
• Keep in mind for the Roth IRA that if your income is between the $183,000 and $193,000 levels for married folks and the $116,000 to $131,000 level for singles you can contribute a reduced amount, but I am not going to bore you with that here)
• Contributions: Roth 401(k)  contribution limits are $18,000 if you're under 50 and $24,000 if you're over 50.  Roth IRA contributions are capped at $5,500 in annual contribution limits if you're under 50 and $6,500 if you're over 50
• Required minimum distributions: one of the biggest differences between the Roth 401(k) and the Roth IRA is that you don't ever have to make distributions from a Roth IRA if you don't want to.  Like traditional 401(k)s and IRAs, Roth 401(k)'s have required minimum distributions which you MUST begin by the time you turn 70  1/2 (you can start taking them at 59 1/2. 
• Employer contributions: this may seem like a no brainer, but only Roth 401(k)'s are eligible for employer contributions
• Withdrawals: you can withdraw contributions without taxes or penalties at any time for Roth IRA's but your ability to do so under a Roth 401(k) while still employed with the company offering the plan is generally not available
• Education expenses: with a Roth IRA you can withdraw your money to pay qualified higher education expenses for yourself, your kids or you grandkids whereas you would need to do so under the hardship provision of your Roth 401(k)

Do also keep in mind that the contribution limits for Roth IRAs and Roth 401(k)'s are completely separate, so you can max out your Roth 401(k) and still contribute the full $5,500 to your Roth IRA at the same time.

I will address why and when to use Roth 401(k)'s vs. Roth IRAs in the near future.