With a Roth 401 (k), the main difference is when the IRS keeps its share. You make contributions to the Roth 401 (k) with money that has already been taxed, just like you would with a Roth Individual Retirement Account (IRA). So all profits grow tax-free and you don't pay taxes when you start withdrawing money when you retire. A Roth account may be more valuable during retirement.
That's because when you take a dollar out of that account, you can put all that dollar in your pocket. When you take a dollar out of a traditional 401 (k) plan, you can only keep the balance after paying distribution taxes. Finally, and this is a bit complicated and not always available, you can sometimes have more access to your funds in a Roth 401 (k) than in a Roth IRA. Whether you're a current employee or you're changing jobs, you may have to choose between pre-tax contributions and those from the Roth 401 (k) plan, and it may be more complicated than you expect.
Within a Roth IRA, you'll never have to make a distribution, and there are other key differences between a Roth 401 (k) and a Roth IRA. Most employers that offer both a Roth 401 (k) and a traditional 401 (k) will allow you to switch from one to the other or even split your contributions. Meanwhile, converting a traditional 401 (k) into a traditional IRA doesn't help you avoid RMDs, and you can't convert that account into a Roth IRA without incurring high taxes. The Roth IRA doesn't require minimum distributions, so you can keep that money and transfer the account to your heirs.
If you plan to increase your income or increase taxes in retirement, tax-exempt withdrawals from Roth contributions may make sense, and tax-deferred contributions may be better if you expect lower income and taxes.