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Does Your Employer Offer The Roth 401k?

401k.jpgHopefully more companies will start to offer these plans.  They had been scheduled to disappear in 2011, but the Pension Protection Act will make these plans permanent.

If your company does offer both of these plans you have a decision to make and may elect to use both.  A recent WSJ article (9/6 subscription required} written by Jonathan Clements provided these suggestions:

  • Favor the regular tax-deductible 401k if you expect to be in a much lower tax bracket in retirement.
  • Opt for the Roth 401k if you don't expect your tax bracket to drop much, you want to make tax-free withdrawals before age 59 1/2, or if you plan to bequeath the account.
Posted on Saturday, September 16 by Registered CommenterWise Owl in | Comments Off