Roth 401(k)

A 401(k) in which a contributor makes post-tax contributions in exchange for tax-free withdrawals after retirement. Instituted in 2006, this investment vehicle involves a worker placing a portion of his/her post-tax income into a 401(k) account and allowing it to be invested. When the investor begins withdrawals, all contributions and income resulting from its investment are free from taxation. Withdrawals prior to the age of 59.5 are subject to excise taxes, but the investor must begin disbursements before the age of 70.5, unless he/she is still employed with the company offering the 401(k). Most employees are allowed to place up to $16,500 (as of 2009) into a 401(k), and some employers have matching contributions. As with traditional 401(k)s, a Roth 401(k) is an employee benefit, and a worker must have a sponsoring employer to take advantage of one. However, a self-employed person may also set up a 401(k) for himself/herself.

Roth 401(k).

The Roth 401(k), which was introduced in 2006, allows you to make after-tax contributions to your account in an employer sponsored plan.

Earnings may be withdrawn tax free, provided that you have left your job, are at least 59 1/2, and your account has been open five years or more.

Both the Roth 401(k) and the traditional 401(k) have the same contribution limits and distribution requirements. You can add no more than the annual federal limit each year, and you must begin taking minimum required distributions (MRD) by April 1 of the year following the year you reach age 70 1/2. You can postpone MRDs if you are still working.

You may not move assets between traditional and Roth 401(k) accounts, though you may be able to split your annual contribution between the two. If you leave your job or retire, you can roll Roth 401(k) assets into a Roth IRA, just as you can roll traditional 401(k) assets into a traditional IRA.

Most 401(k) plans, including the Roth, are self-directed, which means you must choose specific investments from among those offered through the plan.

单词	roth 401(k)
释义	Roth 401(k) Roth 401(k) A 401(k) in which a contributor makes post-tax contributions in exchange for tax-free withdrawals after retirement. Instituted in 2006, this investment vehicle involves a worker placing a portion of his/her post-tax income into a 401(k) account and allowing it to be invested. When the investor begins withdrawals, all contributions and income resulting from its investment are free from taxation. Withdrawals prior to the age of 59.5 are subject to excise taxes, but the investor must begin disbursements before the age of 70.5, unless he/she is still employed with the company offering the 401(k). Most employees are allowed to place up to $16,500 (as of 2009) into a 401(k), and some employers have matching contributions. As with traditional 401(k)s, a Roth 401(k) is an employee benefit, and a worker must have a sponsoring employer to take advantage of one. However, a self-employed person may also set up a 401(k) for himself/herself. Roth 401(k). The Roth 401(k), which was introduced in 2006, allows you to make after-tax contributions to your account in an employer sponsored plan. Earnings may be withdrawn tax free, provided that you have left your job, are at least 59 1/2, and your account has been open five years or more. Both the Roth 401(k) and the traditional 401(k) have the same contribution limits and distribution requirements. You can add no more than the annual federal limit each year, and you must begin taking minimum required distributions (MRD) by April 1 of the year following the year you reach age 70 1/2. You can postpone MRDs if you are still working. You may not move assets between traditional and Roth 401(k) accounts, though you may be able to split your annual contribution between the two. If you leave your job or retire, you can roll Roth 401(k) assets into a Roth IRA, just as you can roll traditional 401(k) assets into a traditional IRA. Most 401(k) plans, including the Roth, are self-directed, which means you must choose specific investments from among those offered through the plan.
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