My employer recently began offering Roth 401k contributions. I decided to switch my contributions to the Roth 401k, figuring that it is impossible to guess what my tax situation will be in 25 years (and likely tax rates are going up, rather than down), so it will be good to have both pre-tax and post-tax dollars with different tax treatment at withdraw when I need it.
Much to my surprise, my benefits plan contributed the Roth contribution to the same 401k account. On the statement it now tracks how much is contributed to the account pre and post tax. I had assumed incorrectly (because none of the information I could find about our new plan mentioned this at all) that I would have 2 separate accounts, and that I would be able to choose which account to draw from at retirement, similar to my IRA accounts.
So now my question is, how are withdrawals taxed? Do you get to choose pre and post tax treatment at withdrawal time? What about minimum required withdrawals? How is growth tracked? Are they going to track the amount of growth attributed to pre and post tax dollars? This seems way overly complicated having all the money co-mingled in the same account...
Update: Have confirmed that account statement does account for pre-tax, match and post-tax contributions and earnings separately, but I have to dig for it buried in generated statements in the on-line system.
Just looking at the current holdings, investment elections, re-balancing and transfers apply to the entire value of all the investments regardless of the cash source, which is somewhat annoying, but I can live with it.
Assuming that littleav's answer is correct and hoping that a rollover to separate IRA accounts at retirement is an option for better control :)