Benefits Of Roth 401 K
Benefits of Roth 401 K
Simply put, companies have now realized their perks ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Å“particularly when they want to set up retirement packages for their workers, executives and business owners. You company can offer you a Roth 401K plan that gives you an opportunity to contribute a certain percentage that will grow over the long haul tax-free! For instance, if you happen to be a manager, the Roth 401 K plan will not only suit you but your employees as well.
1. Enjoy tax-free benefits
The reason most companies use the Roth 401 K plan is the fact that revenues grow without taxation whatsoever, as each employee is required to make a contribution with dollars that have already been taxed. In other words, when you want to withdraw your money upon retirement, you enjoy tax-free benefits as along as you are more than 59 years of age. With a Roth 401 K plan, business owners, executives and professionals can save more money to keep their retirement plans on track.
2. No limitations
Income limits often prevent those high in the salary ladder from having this amazing retirement plan. Nonetheless, the Roth 401 K plan does not have income barriers. Moreover, you are not limited to withdraw money upon attaining the age of 75.
3. Tax benefits
Which is betterÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Å“paying tomorrow’s taxes or today’s taxes? Taxes are bound to go up in the coming days due to the recession. This is where the Roth 401 K plan comes in handy, it gives you the opportunity to settle your taxes today and enjoy a tax free growth upon retirement. In other words, your retirement package is free from taxation, how cool is that!
4. Higher contributions
Traditionally, one was required to put up an amount of up to $5,000 or $6000 provided that you were more than 50 years of age. However, the Roth 401K plan allows you to contribute as much as you like and has a contribution limit of $22,000 for those who are 50years and above.
Uncertainty is the only drawback to this plan. The tax laws may change in future ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Å“nobody knows.