Question
Why roth 401k?
Interesting Question? 
(5) 
(9)
(5) (9)
Answers (1)
26th Oct 2009 by Mark P. Cussen, CFP, CMFC
A Roth 401(k) will allow you to accumulate more money in a tax-free account than any other method available. Roth 401(k)s permit contributions of up to $16,500 in 2009. This can be a tremendous boon for highly-compensated executives who may make too much money to permit Roth IRA contributions. Roth 401(k)s do not have the income limitations assigned to Roth IRAs. An employee who contributes $10,000 a year to this plan can accumulate nearly a half-million dollars in 20 years, assuming an 8% annual rate of growth. The only real disadvantages of these plans are that their contributions are nondeductible, and they are only availabe to employees of companies that offer them.
A Roth 401(k) will allow you to accumulate more money in a tax-free account than any other method available. Roth 401(k)s permit contributions of up to $16,500 in 2009. This can be a tremendous boon for highly-compensated executives who may make too much money to permit Roth IRA contributions. Roth 401(k)s do not have the income limitations assigned to Roth IRAs. An employee who contributes $10,000 a year to this plan can accumulate nearly a half-million dollars in 20 years, assuming an 8% annual rate of growth. The only real disadvantages of these plans are that their contributions are nondeductible, and they are only availabe to employees of companies that offer them.
Like This Answer? (1) (0)
This answer is the subjective opinion of the writer and not of FinancialAdvisory.com
(1) (0)
20th Oct 2009 In Retirement
1 Answers | 107 Views