From: Karen Younge 
Newsgroups: misc.invest.financial-plan
Subject: Re: Roth 401(k) available starting 2006
Date: Sat, 2 Apr 2005 18:54:22 CST
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Do you know whether these Roth accounts will also be available within 457
Deferred
Compensation plans for government employees?

Karen

beliavsky@aol.com wrote:

> Here is the beginning of the article.
>
> New Roth 401(k) Plans
> Target High-Income Earners
>
> By JANE J. KIM
> Staff Reporter of THE WALL STREET JOURNAL
> March 30, 2005; Page D2
>
> "Individuals who make too much money to contribute to a Roth individual
> retirement account may get a new opportunity to do so next year.
>
> Earlier this month the Treasury Department and the Internal Revenue
> Service released proposed regulations that provide guidance on how
> employers can add Roth 401(k) accounts, created as part of the 2001 tax
> law, to their plans starting January 2006. The new accounts will
> combine features of traditional Roth IRAs with those of 401(k)s.
>
> As with Roth IRAs, individuals pay income taxes on contributions
> upfront but can withdraw those contributions and earnings tax-free
> after age 59*, provided they have held the account for at least five
> years. In contrast, contributions to a 401(k) are made with pretax
> dollars, which immediately reduces their taxable income, and
> withdrawals are later taxed as ordinary income."