The Roth feature within a 401(k) plan allows employees to “tax diversify” their income sources for retirement. Employees have the flexibility to direct contributions between both types of 401(k) accounts as their current and future tax situation dictates. Additionally, for those Allison employees who are ineligible for a Roth IRA, a Roth 401(k) provides an opportunity to build a tax-free retirement income source.
We applaud Allison Transmission for taking advantage of this provision in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).
Request a free copy of Mainstay Capital Management’s “Roth 401(k) Investment Guide”.