First available in 2006, the Roth 401(k) is a relative newcomer to the retirement savings world, and employers were slow to adopt it. That has changed in recent years. A 2017 survey found that seven out of 10 large and mid-size employers with defined contribution plans offer Roth accounts, and another 15% were planning to add the option or considering doing so.
This Week, Craig Siminski, of the Equity Design Group, shares some helpful information with those who are considering whether or not a Roth 401(k) is their best option.
A Roth 401(k) is a separate account within the employer’s 401(k) plan that has tax advantages and limitations similar to a Roth IRA.
However, 401(k)s have much higher annual contribution limits ($18,500 for all accounts combined in 2018 or $24,500 if you are age 50 or older). And unlike Roth IRAs, there are no income limits for contributing to a Roth 401(k).
If the Roth option is offered in your workplace plan, you might consider its long-term…
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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 20 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
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