Roth Option Boosts Some 401(K) Plans

Summary

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Thanks to a major jump-start Congress ordered earlier this year, tens of thousands of current and future federal and postal workers will likely have bigger 401(k) account balances when they retire.

The centerpiece of the changes in the federal Thrift Savings Plan is the introduction of a Roth option. That is coming in mid-2011. It will mean federal investors can put money into a regular pre-tax 401(k) plan account or into the Roth option. Or both.

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Extract

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Roth Option Boosts Some 401(K) Plans

Under the current investment plan, which will continue, individual contributions to the 401(k) or TSP account are on an after-tax basis. That gives them a tax break now. But it means that when they begin withdrawals, t...

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