The purpose of this site is to provide technical and planning information on the Roth 401(k) to practitioners and consumers. For information on the Roth IRA, please see our sister site, the Roth IRA Web Site. For 2007 and 2008, salary contributions to a Roth 401(k) are limited to $15,500 (or $20,500 if age 50 or higher).
The Pension Protection Act of 2006, signed into law by President Bush on 8/17/06, makes the Roth 401(k) permanent, removing the 12/31/10 expiration date that previously was in force. (8/17/06).
Article submissions or requests for links to articles should be sent to email@rothira.com. Please indicate "Roth 401(k) Article" in the subject line of your e-mail.
| Title | Description (publication date) |
|
New: To Roth or not to Roth 401(k) |
Article by Walter Updegrave (CNNMoney.com,
1/10/2008). Quotes: After getting off to a slow start, Roth 401(k)s are beginning to pick up momentum. ...as a practical matter, I see the Roth as a way for people to effectively boost the amount they save for retirement. |
|
Article by James Lange (Roth
IRA Advisor Web Site, 3/2/06). Quote: In short, if you have two plans, one a traditional 401(k) and the other a Roth 401(k) with the same amount of money in both, the Roth 401(k) plan will be of greater value since the income taxes imposed on withdrawals from the traditional 401(k) greatly reduce its overall value. |
|
|
Roth 401(k) A Good Option For Some Article no longer available. |
Article by Eileen Alt
Powell (Associated Press, 1/25/06) Quotes: "The Roth 401(k) is a fantastic opportunity to sock away a lot of money...that grows tax-free for life," said Ed Slott... Stephen Utkus, a principal with the Vanguard Center for Retirement Research in Valley Forge, Pa., noted that workers long have been advised to diversify their holdings to include stocks, bonds and other investments. The new Roth 401(k) will allow them to diversify their tax exposure... |
|
Is a
Roth 401(k) Right for You? Note: Registration needed to access this article. |
Article by Janet
Novack (Forbes, 1/30/2006) Quote: With a Roth, you get no tax deduction for your retirement savings, but all the money that comes out at the other end is tax free. For a lot of upper-income taxpayers, the Roth is the better deal. |
| A New Era in Retirement Planning | Article by Christopher G.
Laucks (The Tax Advisor, November, 2005) Quote: Now let’s take the same scenario and assume that the investor wants to maximize her contribution to the plan...In this scenario, Roth results in a larger distribution regardless of tax rate changes, even if tax savings on the pre-tax contribution are invested separately. |
|
401(k) or Roth 401(k): Which is better for your needs? Article no longer available. |
Article by Julie Jason (Greenwich Time,
10/2/05) Quote: The longer the holding period, the more the Roth 401(k) will outperform because of tax-free compounding. |
|
New Kid in Town Article no longer available. |
Article by Karen Hube (The Wall Street Journal,
9/26/05) Quote: In terms of the after-tax value of your assets, you'll almost always come out ahead in a Roth 401(k). |
| Roth 401(k) requires tax forecasting |
Article by Kaja Whitehouse (Dow Jones Newswires,
9/3/05) Quote: If tax rates rise to pay off the growing budget deficit, paying taxes now is a good deal. |
| Assessing the Roth 401(k) |
Article by Kathleen M. McBride
(Investment Advisor, July 2005) Quote: If you now offer a 401(k) for yourself and your employees, adopting the Roth plan may be a tremendous chance for you and your employees to add to retirement savings, because even those who are ineligible because of income caps for the Roth IRA can contribute to the Roth 401(k). |
|
New Roth
plan is a real opportunity Article no longer available. |
Article by Steve Butler (ContraCostaTimes,
7/18/05) Quotes: Finally, a "Loophole for the Little Guy" Here is a legal opportunity to generate money and never pay taxes on it. |
|
Roth 401(k)s: Not
just for the rich Article no longer available. |
Article by Leah Carlson (Employee Benefit News,
July 2005) Quotes: The accounts fit particularly well with a highly paid workforce that will be in a high tax bracket during retirement, experts say. The accounts are a good fit for low-income parents in the 10% tax bracket (or lower), consistent savers and workers with generous retirement benefits... |
| Cardin Introduces New Retirement Security Legislation |
Congressional Press release dated
4/28/05 by Rep. Benjamin L. Cardin (D-MD) Quote: These plans, which have not yet come into effect, will add one more plan to a swamped market and lose significant amounts of revenue over time. |
|
Putting a Roth spin on the traditional 401(k) Article no longer available. |
Article by Eileen
Ambrose (The Baltimore Sun, 3/13/05) Quote: Basically, workers who are in a low tax bracket but expect to be taxed at a higher rate in retirement are better off in the Roth 401(k), experts said. Most likely these are younger workers. |
| New type of Roth accounts | Article by Kathleen
Pender (San Francisco Chronicle, 3/3/05) Quotes: Roth 401(k) plans will have no income limitations. Under the proposed regulations, people would have to start taking money out of their Roth 401(k) plans at age 70 1/2...However, the proposed regulations also say money from a Roth 401(k) plan could be rolled over into a Roth IRA. The proposed regulations do not allow conversions from regular 401(k) accounts into Roth 401(k) accounts. |
| IRS clarifies Roth 401(k) rules | Article by Jerry
Geisel (Business Insurance, 3/3/05) Quotes: Roth 401(k) plans, which were authorized by a 2001 law and go into effect Jan. 1, 2006, allow participants to make aftertax contributions. The rules also require that Roth 401(k) plan participants begin to take distributions from the plans no later than age 70½. That minimum distribution rule does not apply to somewhat similar savings vehicles known as Roth IRAs. |
|
The Roth 401(k) May Be Here Soon Article no longer available |
Article by
Michael E. Kitces (Financial
Advisor, June, 2004) Quote: The bottom line is that the Roth 401(k) may be an extremely favorable new method of saving for individuals, particularly if you believe that tax rates will rise in the future. |
|
Roth 401(k): Next big thing in 2006? Note: Registration Needed to access this article, $1.95 to nonsubscribers |
Article by Rick
Miller (Investment News, 4/19/04) Quote: "It's going to be the big new thing," said Mr. Graff, who predicts that the Roth 401(k) will lead to increased 401(k) contributions overall. |
|
Shifting
Responsibility for Funding Pensions Note: Registration Needed to access this article |
Article by Mary Williams
Walsh (The New York Times, 2/20/03) Quote: The only live plans to change the tax treatment of company retirement benefits involve something called the Roth 401(k)...The accounts are scheduled to appear in 2006, but the administration wants to move the debut up to 2004. |
| Dramatic Improvements in Retirement Plan and IRA Rules | Article by James Lange (Roth
IRA Advisor Web Site, 10/11/00). Quote: Current participants in 401(k) and 403(b) plans will be able to make contributions to a retirement plan through work, which will have practically all of the tax characteristics of a Roth IRA. |
| Title | Description (date posted) |
FAQs regarding Designated Roth Accounts |
These frequently asked questions and answers are provided by the IRS. (3/2/06). |
| Designated Roth Accounts Under Section 402A | This is the text of the proposed IRS regulations relating to the taxation of distributions from Roth 401(k) and Roth 403(b) accounts, REG-146459-05, issued 1/26/06. (1/27/06). |
| Designated Roth contributions to cash or deferred arrangements under section 401(k) | This is the text of the final Roth 401(k) regulations, T.D. 9237, issued 1/3/06. (1/27/06). |
| Proposed Roth 401(k) Regulations | This the text of the proposed final Roth 401(k) regulations, REG-152354-04, issued March 2, 2005. (3/7/05). |
| Senate Finance Committee Report's Discussion of Proposed Roth 401(k) | This is the Senate Finance Committee's explanation of the proposed Roth 401(k). (9/23/00). |
| Senate's Statutory Language for Proposed Roth 401(k) | This is the Senate version of the proposed statute creating the Roth 401(k). (9/27/00). |