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Plan ahead for new retirement-plan option: Roth 401(k)

by on
in Human Resources

IRS regulations paved the way for a major new retirement plan opportunity. Beginning next January, participants in employer 401(k) plans will be allowed to funnel all or part of their 401(k) contributions into Roth-like accounts. Unlike traditional 401(k) contributions, which are made with pretax dollars, contributions to so-called Roth 401(k) accounts would be made with after-tax dollars. The benefit: Money pulled from these Roth accounts will be 100 percent tax-free after five years. Employers would need to amend their current qualified plans if they choose to allow Roth 401(k) contributions. Read more about Roth 401(k)s at www .roth401k.com.

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