A personal finance blog dedicated discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance.


Monday, August 01, 2005

Look Before You Leap Into the Roth 401(k)

Could there be potential pitfalls to the Roth 401(k)?

According to this article by Jeanne Sahadi on the CNN/Money website talks about some of the drawbacks to investing in the new Roth 401(k) that will be available starting in January of 2006. The Roth 401(k) seems like a no-brainer until you consider the potential tax issues.

However, the younger you are, the more beneficial the Roth 410(k) seems to be. Why? Because the longer you have for your money to grow, the more likely you are to be in a higher tax bracket when you retire.

Also, Jim at Blueprint wrote a pretty nice piece about the Roth 401(k) a while back. He also links to a website called that was set up specifically for the Roth 401(k).You may want to check it out.

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