The Treasury Department issued rules last week aimed at dismissing some of the uncertainties around Roth 401(k) plans.
Originally created as part of a 2001 law, the plans were to be eliminated after 2010, but the Pension Protection Act of 2006 made them permanent. The employer-sponsored savings accounts -- which don’t have any income limitations for participants -- are funded with after-tax money up to a certain contribution limit. After an employee reaches the age of 59-1/2, all withdrawals from the account, including investment gains, are tax-free. The plans are especially attractive to younger employees who think that they will be in a higher tax bracket when they retire.
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