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Started By
Message
Roth 401K
Posted on 11/17/11 at 8:45 am
Posted on 11/17/11 at 8:45 am
My employer has recently started offering this in addition to the traditional 401k. Anybody have any experience with this?
For my personal situation:
I already max out my traditional 401k contribution (16500) and get the employer match of up to 7%. The company 401k is managed through ING and although there is some flexbility in how you invest...it's limited to their basic funds (e.g., large cap, small cap, foreign, bonds, company stock).
I max out my Roth IRA through Vanguard and there are seemingly unlimited options here for investing...problem is...the contribution limits are much lower (like $5000 something).
Here's how I sum up the Roth 401k for myself...if you want to increase your contributions to a 'roth' type system, go for it...but you'll have limited investment flexibilty and you'll have a bunch of your eggs in one basket (all your retirement savings with ING). I don't know all the pros and cons of withdrawing and all that. I don't expect to have to do that.
For my personal situation:
I already max out my traditional 401k contribution (16500) and get the employer match of up to 7%. The company 401k is managed through ING and although there is some flexbility in how you invest...it's limited to their basic funds (e.g., large cap, small cap, foreign, bonds, company stock).
I max out my Roth IRA through Vanguard and there are seemingly unlimited options here for investing...problem is...the contribution limits are much lower (like $5000 something).
Here's how I sum up the Roth 401k for myself...if you want to increase your contributions to a 'roth' type system, go for it...but you'll have limited investment flexibilty and you'll have a bunch of your eggs in one basket (all your retirement savings with ING). I don't know all the pros and cons of withdrawing and all that. I don't expect to have to do that.
4
Posted on 11/17/11 at 10:21 am to TulaneUVA
I'm glad my employer matches 50% of my contributions. $8250 in free money 
Posted on 11/17/11 at 11:30 am to guttata
quote:
I'm glad my employer matches 50% of my contributions.
pics of what your employer matches or GET OUT NOW!
Posted on 11/17/11 at 11:43 am to Fat Bastard
I do consider myself pretty lucky that I work for a co. that is so generous and give that as an incintive to save for retirement.
Posted on 11/18/11 at 5:44 am to TulaneUVA
The main difference between Roth and traditional is that a Roth is post tax. I don't know where you are going with the rest of this.
Posted on 11/18/11 at 9:10 am to TheHiddenFlask
I mean, did you read the rest any of my post?
Posted on 11/19/11 at 7:15 am to TulaneUVA
From your message, we work for the same company.
I'm going to be watching what the MT experts say about this.
I'm leaning towards putting a couple of percent into a Roth.
I'm going to be watching what the MT experts say about this.
I'm leaning towards putting a couple of percent into a Roth.
Posted on 11/19/11 at 7:52 am to TulaneUVA
quote:
Here's how I sum up the Roth 401k for myself...if you want to increase your contributions to a 'roth' type system, go for it...but you'll have limited investment flexibilty and you'll have a bunch of your eggs in one basket (all your retirement savings with ING). I don't know all the pros and cons of withdrawing and all that. I don't expect to have to do that.
I really don't understand where you are going with this. Why would all your eggs be in one basket with ING? And in terms of investment flexibility, I don't understand why your Roth 401k investment options would be different than your Traditional 401k options.
Posted on 11/23/11 at 9:16 am to LSUtoOmaha
quote:
Why would all your eggs be in one basket with ING? And in terms of investment flexibility, I don't understand why your Roth 401k investment options would be different than your Traditional 401k options.
Because ING is one provider of investment options, and their opinion/moves on their funds are obviously different from other companies. Their small cap, large cap, or foreign funds for example are of a different configuration than lets say Vanguard or T Rowe. They may or may not perform as well although the difference could be minute.
The traditional 401k vs Roth 401k investment options would not be different since they are both with ING.
Posted on 11/23/11 at 9:49 am to TulaneUVA
Why would you not open up a brokerage account with a Roth?
Then you could choose whatever mutual fund, stocks, bonds etc that you would like?
There would be no vanguard only, ing only etc.
Then you could choose whatever mutual fund, stocks, bonds etc that you would like?
There would be no vanguard only, ing only etc.
Posted on 11/23/11 at 1:08 pm to TulaneUVA
Just make sure you have enough money outside of these retirement accounts. The best thing about Roth accounts is the earnings on growth within the account are never taxed. However, the rules for distributions out of a Roth 401k are more restrictive than for a Roth IRA, preventing withdrawals outside of very limited circumstances which I believe are the same as for a traditional 401k. I wouldn't be concerned with the money all being with ING only with their limited investment options. The 401k funds held by ING shouldn't be subject to their creditors and SIPC may cover you.
Posted on 11/23/11 at 6:56 pm to TulaneUVA
quote:
Anybody have any experience with this?
My company started offering the Roth 401K in addition to the traditional a few years ago and I started contributing a portion to the Roth option immediately. The company match only goes into the traditional pre tax plan. I like having each option in my 401K.
Posted on 11/23/11 at 7:50 pm to LSU9102
quote:
Why would you not open up a brokerage account with a Roth?
Exactly. There is no reason to go through your employer that I am aware of. I'm self employed and set up Roths for my wife and I at Schwab. Very flexible.
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