Roth 401ks are here

IRS recently approved Roth 401ks. Employers have to amend their 401k plans to allow for them. Distributions can be taken at age 59.5 and must begin at 70.5 years old or on death or disability. The funds must be in the Roth 401k for five years before they can be distributed without penalty. All earnings on the account are tax free.

The maximum in all 401ks for 2006 $15,000.00, or $20,000.00 if you are over age 50.

These look like a great opportunity, especially for high income earners who don’t qualify for a Roth IRA.

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