Roth IRAs and Roth 401ks are two different types of retirement plans that help you save for retirement. You are not allowed to take a tax deduction for your contributions to these plans. Instead, the money grows tax free in the account and can be withdrawn--again tax free--at retirement.
You must contribute to a Roth IRA on your own regardless of your employment; it is a personal account. You can only contribute to a Roth 401k plan through you employer. If your employer does not offer a Roth 401k, you cannot contribute.
The contribution limits for Roth IRAs is significantly lower than Roth 401k plans and both are adjusted annually. For 2009, the contribution limit for Roth IRAs is $5,000 if you are under 50 and $6,000 if you are 50 or older. For Roth 401ks, the limit is $16,500 if you are under 50 and $22,000 if you are 50 or older.
A Roth 401k plan is eligible to get matching contributions from your employer. Because you are the only contributor to a Roth IRA, it cannot receive such matching contributions.
You can only invest your Roth 401k contributions in the options provided by your company. Since you control your Roth IRA, you can wherever you want your money invested, such as stocks, bonds, mutual funds, or real estate.
Required Minimum Distributions
There are no required minimum withdrawals (distributions) for a Roth IRA as long as you are alive, so you do not have to start withdrawing the money if you do not want to. For Roth 401ks, you must start taking withdrawals at age 70 1/2 based on the IRS life expectancy tables.