The new Roth option for 401(k) and 403(b) plans: A decision framework

Beginning in 2006, individuals participating in traditional 401(k) or 403(b) elective deferral plans can opt to treat elective deferrals as designated Roth contributions. Under this option, Roth contributions are not excluded from gross income, but qualified distributions are not subject to taxation...

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Bibliographic Details
Published inJournal of financial service professionals Vol. 56; no. 1; p. 45
Main Authors Anderson, Kenneth E, Murphy, Daniel P
Format Journal Article
LanguageEnglish
Published Bryn Mawr Society of Financial Service Professionals 01.01.2002
Subjects
Age
Decision making
Deferred compensation
Financial services
Inheritances
Retirement plans
Roth IRAs
Taxation
United States > US
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Summary:Beginning in 2006, individuals participating in traditional 401(k) or 403(b) elective deferral plans can opt to treat elective deferrals as designated Roth contributions. Under this option, Roth contributions are not excluded from gross income, but qualified distributions are not subject to taxation. This article describes the new Roth option and provides decision models to assist in determining whether a plan participant should make traditional elective deferrals or make designated Roth contributions.
ISSN:1537-1816
2381-8875