A New Twist on 401(k) Building; Coming in 2006: Accounts That Offer Tax Break At Withdrawal Time

A new retirement tax break coming next year will help some prosperous families and perhaps some young people with a long time to save.

The new break is the Roth 401(k) --- a cross between an individual retirement account and a 401(k).

Roth 401(k)s will offer no upfront tax break, but you will owe no income tax when you start taking the money out.

Roth IRAs, which have been around for years, are do-it-yourself projects. Roth 401(k)s will be offered and administered by employers, much like the 401(k)s many already offer.

This new kind of 401(k) certainly is an interesting proposition, if you can afford to save significant amounts and if your employer offers a Roth 401(k).

Source: Insurance News Net
A New Twist on 401(k) Building; Coming in 2006: Accounts That Offer Tax Break At Withdrawal Time