Roth describes how the contribution is taxed; it does not describe what type of contribution it is. When people hear “Roth” in a 401(k) plan, they often think of an employee choosing to make a Roth 401(k) contribution instead of a traditional pre-tax contribution. That’s still true. But today, an employer profit-sharing contribution can also … Continue Reading
Until recently, participants receiving matching and nonelective contributions could only have had those contributions treated as pre-tax – not subject to withholding for federal income tax, Social Security or Medicare tax. That’s changed. Recent retirement law changes permit participants to elect to have employer matching and nonelective contributions treated as Roth contributions instead of the … Continue Reading
