View Single Post
  #27  
Old 08-18-2007, 09:40 AM
'Chair 'Chair is offline
Senior Member
 
Join Date: Jun 2006
Posts: 833
Default Re: 401k contributions: pre/post tax and roth.

w/ regards to the employer match on a Roth 401k contribution...

http://www.financial-planning.com/pu...050214101.html
There is, however, a twist to the Roth 401(k)s. Employees will place an after-tax amount in contributions to the Roth 401(k). But the employer match for the contribution--up to 3% of income at most companies--will go into a separate regular 401(k) account. This would enable the company to deduct its cumulative match contributions up front from its corporate income taxes.

Essentially, employees would get the benefit of not having to pay taxes on withdrawals from their contributions from the Roth 401(k). But they will have to pay income taxes on withdrawals from the company's contributions, including the earnings that have built up over the years.
Reply With Quote