Even though a roth 401k and a safe harbor 401k are both set up as 401k retirement investment vehicles, each plan has a different tax structure.

ROTH 401K

With this type of 401k, contributions are made with after tax money, so your withdrawals are tax free. The withdrawals are tax free if the account has been held for 5 years and you are over age 59. Funds from a roth 401k can be rolled over to a roth ira. The 2009 roth 401k contribtuion limit is $16,500 with a catch up contribution of $5,500 if you are over the age of 50.

SAFE HARBOR 401K

Similar to a traditional 401k, safe harbor 401k contributions are made with pre tax money. Your contributions can reduce your taxable income. But your withdrawals from a safe harbor 401k are not tax free. The 2009 safe harbor 401k contribution limit is also $16,500 with a catch up contribution of $5,500 if you are over age 50.

The advantage of a safe harbor 401k over a traditional 401k is that a safe harbor is easier to administer.