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Roth 401(k)
The Roth 401(k), as enacted in 2001, goes into effect on 1/1/2006 and stays available through 12/31/10 before disappearing unless extended by legislative action.
Actually, it could disappear sooner if pension and savings changes like those proposed by the President's Advisory Panel on Federal Tax Reform are enacted.
Under the Panel's Simplified Income Tax Plan, "Save at Work" accounts would replace 401(k)'s: Save at Work plans would follow the existing contribution limits and rules for 401(k) plans, but the plan qualification rules would be greatly simplified.
Also, "Save for Retirement" accounts (with $10,000 per year contribution limits) would replace IRAs and Roth IRAs. In such a case, what would happen to Roth 401(k) balances? It would seem likely that such balances would eventually be eligible to be rolled over to a "Save for Retirement" account, which is essentially a super-charged Roth IRA.
As such, any amounts contributed to Roth 401(k)'s might be thought as early contributions to a "Save for Retirement" account. Alternatively, the Panel's second proposal, the Growth and Investment Tax Plan, suggests Roth-style "Save at Work" plans that would be similar to Roth 401(k) accounts.
It's hard to imagine such Roth-style accounts being enacted to replace deductible 401(k) plans. (10/25/05, 11/02/05). |
