Jump to content

How often does an automatic-contribution arrangement specify Roth contributions?


Peter Gulia

Recommended Posts

If a 401(k) retirement plan allows a choice between Roth and non-Roth elective deferrals and provides an automatic-contribution arrangement, how often is the default Roth elective deferrals and how often is the default non-Roth elective deferrals?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

Link to comment
Share on other sites

An employer presumes that retirement savings is good for the employee who doesn't opt out.

But how does an employer decide whether Roth or non-Roth contributions are better for such an employee?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

Link to comment
Share on other sites

K2retire, thank you for the help.

BenefitsLink mavens, any different or further observations?

Is there an argument for automatic Roth contributions under an assumption that an eventual retiree's income tax rates are not likely to be lower than current rates?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

Link to comment
Share on other sites

I haven't seen the following addressed (and I am clueless on how it works but forwhatever reason the following popped into my head last week):

person starts collecting soc sec. As I understand it, it can be taxed depending on what one's adjusted gross income would be. now if you take a distribution it effects you adjusted gross income (unless it is from a Roth)????

so would having a Roth make a difference at that point?

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...