The Retirement Challenge: Will You Sink or Swim?

Lesson 12 The Roth 401(k), 403(b) Option

A new option enables participants to forgo the current tax deduction on their contributions in favor of totally tax-free distributions later. This is particularly attractive to employees who believe they will be in a higher tax bracket after retirement, or who are currently in a low bracket but expect their career income to rise. Strangely enough, although there is an income limit for Roth IRA contributions, there is no income limit for Roth 401(k) contributions.

Do-It-Yourself

Roth 401(k) or Traditional 401(k): Use this calculator to help determine if a traditional 401(k) or Roth 401(k) might be best ...