The Roth 401(k)/403(b) — A Great Planning Opportunity

[roth401k]

The Roth 401(k)/403(b) — A Great Planning Opportunity

Beginning in 2006, plan sponsors will have the option of starting up a Roth 401(k) or 403(b) or adding these Roth features to an existing plan. A Roth 401(k) or 403(b) allows participants the option of making all, or a portion of their deferrals on an after-tax basis. Planning and analysis is critical in determining who might benefit from a Roth 401(k) or 403(b) and should be performed now.

The maximum deferral limit in 2006 will be $20,000 for those who are age 50 or older in 2006. Income taxes would be paid currently on the deferrals designated as Roth contributions, but “qualified” distributions from Roth accounts are tax free! That means all of the earnings on qualified Roth monies will never be taxed.

Roth deferrals and earnings...............


Full Article in PDF:
http://www.plantemoran.com/resources/publicationdownloads/HC_2005_Issue_1.pdf