Roth 401(k)s

Roth 401(k)s bring together the higher contribution limits of a 401(k) with some of the tax-free withdrawal options of a Roth IRA.

What is a Roth 401(k)?

A Roth 401(k) is exactly what it sounds like: it’s a combination of a 401(k) and a Roth IRA. It is an employer-sponsored investment savings account that is funded with post-tax money up to the plan’s contribution limit. This type of investment account is well-suited to people who think they will be in a higher tax bracket in retirement than they are now.

Who Is Eligible for a Roth 401(k)?

If your employer offers it, you’re eligible. Unlike a Roth IRA, a Roth 401(k) has no income limits. That’s a great feature of the Roth 401(k). No matter how much money you earn, you can contribute to a Roth 401(k), if your employer offers it.

What sets us apart from other TPA’s?

  • We sit down with our clients to customize a plan to fit their specific needs.
  • With one TPA assigned to your plan, you receive personalized service and a relationship is built with you, your employees and your TPA.

What is the difference between a Roth 401(k) and a traditional 401(k)?

  • A Roth 401(k) is a post-tax retirement savings account. That means your contributions have already been taxed before they enter your Roth 401(k) account.
  • On the other hand, a traditional 401(k) is a pretax savings account. When you invest in a traditional 401(k), your contributions go in before they’re taxed, which makes your taxable income lower.

What are the contribution limits for a Roth 401(k)?

For 2019, the 401(k) contribution limit is $19,000. This contribution limit applies to any 401(k) contributions, whether they are in a Roth 401(k) or a traditional 401(k). That means if you’re contributing to both, the combined total of your contributions can’t exceed $19,000.

If you’re 50 or above, the contribution limit increases to $24,000.

Let us exceed your expectations. Contact Anya Wells at (888) 388-1040 to learn more.


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