Roth 401(k) may be boon to savers with high incomes

[roth401k]

Roth 401(k) may be boon to savers with high incomes
By John Lux
Tribine staff writer
Published March 20, 2005


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Here's what you need to know:

- Roth IRAs vs. Roth 401(k)s. The new Roth 401(k) has fewer restrictions than Roth IRA accounts, which have been available since 1997. The Roth IRA cannot be used by people with incomes over $110,000 ($160,000 for a married couple), and individuals are limited to an annual contribution of $4,000 in 2005 ($4,500 if you're over 50). Roth 401(k)s will have no income restrictions, and you will allowed to put up to $15,000 into a Roth 401(k) in 2006.

- Contribution limits. If you contribute to a standard 401(k) and Roth 401(k), your total contribution cannot exceed $15,000. Workers over 50 can make an additional $5,000 catchup contribution in 2006. Be careful how your withholding is set up: If the amount withheld during the year puts you over the limit and the excess in the Roth 401(k) is not returned to you by the following April 15, you could face penalties.

There is no provision for company matches of Roth 401(k) .......

Full Article Here:
http://www.sun-sentinel.com/business/sns-yourmoney-0320onthemoney,0,476450.story?coll=sfla-business2