Planadviser: Plan Participants Need Understanding of Roth Accounts

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  • According to a Willis Towers Watson survey, the percentage of plan sponsors offering a Roth option has increased in recent years; however, very few plan participants that have this option are actually making use of it.
  • Unlike traditional 401(k) contributions, Roth 401(k) contributions are made using after-tax dollars, which allow for tax-free withdrawals at retirement.
  • Contributions to a Roth 401(k) may help to diversify a participant’s exposure to taxes in retirement.


Our Take

  • Investors (in this case, retirement plan participants) need to examine all options available to them in their plan.
  • A Roth 401(k) account can be a helpful tool to manage unknown, future tax liabilities. However, not every option available in a retirement plan is for everyone. If investors are unsure whether or not to utilize an option, they should seek out additional help from the plan’s provider. Or please call us and we will be happy to discuss your situation.