Skip- thank you for clarifying, until I read that post 4 times, it did
not register upstairs.

So the financial planning tool I think I will need is this:

Roth IRA begins to "phase out" at a certain AGI. Traditional 401k can
reduce the taxable income, and therefore allow a maximum contribution
to a Roth IRA.

so if making "substantially" less than the AGI limits for a Roth IRA,
one could save $18,000 for retirement a year and not pay taxeson
qualified distributions. $14,000 into 401k and $4000 into IRA. As one
approached the AGI, it would make sense to start deducting taxes NOW,
to allow other contributions to still maintain the "Roth" status.

This assumes one "passed" a test which suggested income taxes in
retirement would be equal to/ higher than while working and/or the
advantages of the distribution rules of the Roth accounts (no RMD for a
Roth 401k?) favored the new treatment of the contributions.

I see a second issue as I like not paying taxes now. I use a Roth more
for the distribution rules and tax deferred growth and less because
"withdraws are tax free". Not that I mind withdraws being "tax free",
though

I see my strategy as: contribute to deductable 401k, then Roth IRA. If
Roth IRA is phased out, consider switching how 401k is charactorized.

On Mon, 25 Jul 2005 06:53:44 CST, "jIM" <noreplysoccer[at]hotmail.comwrote:

- quote -

As another poster pointed out, my comments on sending money to both
Roth 401k and traditional 401k pertained to 401k, not IRA.

-HW "Skip" Weldon
Columbia, SC

links were posted and I thought of most forums I read on a variety of
subjects, those postings were someone's opinions, with a significant
slant they are BETTER than a traditional 401k. They may be better,
they may not be, but for my first exposure to them to be the forum
posted, the information did not catch my attention.

back to skip's post:
"3. Assuming your employer offers Roth option, you may contribute to
both, but total contributions are limited to the annual max - this
year $18,000 ($14,000 under 50). For example, you could send $9,000
to the trad plan and another $9,000 to the Roth."

If this is true (I can contribute more to Roth IRA than current 4k/year
limits), then I think this is GREAT. I contribue around 6k/year to my
401k, so being able to up the Roth contributions to around 6K a year as
well sounds like a GREAT technique to me.

"jIM" <noreplysoccer[at]hotmail.com> wrote in message
news:1122205798.345556.209200[at]g47g2000cwa.googlegroups.com...
- quote -


I'm not sure where you think anyone said that these links were "detailed and
informative", but I'm sorry you failed to find them useful. There isn't a
lot of concrete info out there yet, as per normal the government is still
"fine tuning". Hope these site continue to update as info becomes
available. Just trying to help.

--
Kathy Morgan EA
H & R Block Master Tax Advisor
Proud Mom of Sgt RT Morgan
1/156 AR BN C Company
Louisiana Army National Guard
Baghdad, Iraq

HW "Skip" Weldon wrote:
- quote -

I think this is answering a different question than asked by
the poster. Contributions to the Roth IRA are, I believe,
completely separate from contributions to the Roth 401(k).
In other words, assuming one is eligible, one can contribute
to both. The $18000 ($14000 under 50) limit applies only
to the contributions to the 401(k)s. An additional $4000
can be contributed to the Roth 401(k) provided one qualifies.
This is based on my understanding from what I've read so far.

Anoop

jIM wrote:
- quote -

The questions may not have been asked, but the answers are there.

- quote -

You can't. See http://roth-401k-forum.com/viewtopic.php?t=127

- quote -

You can't. See http://www.roth-401k-forum.com/viewtopic.php?t=11

- quote -

Yes. See http://www.roth-401k-forum.com/viewtopic.php?t=79

On 24 Jul 2005 12:40:02 GMT, "jIM" <noreplysoccer[at]hotmail.com> wrote:


- quote -

There's a lot we don't know yet - hence my trying to start this
thread. Meanwhile here's my understandings. If wrong I assume
someone will take great glee in correcting me. <grin
1. Roth 401k is allowed, not mandatory - some employers will not offer
it. Assuming your employer offers it, matching contributions always go
to the "traditional" 401k, not the Roth.

2. Don't know. Haven't seen any mention of being able to convert.
Perhaps someone else knows.

3. Assuming your employer offers Roth option, you may contribute to
both, but total contributions are limited to the annual max - this
year $18,000 ($14,000 under 50). For example, you could send $9,000
to the trad plan and another $9,000 to the Roth.



-HW "Skip" Weldon
Columbia, SC

I did not find the above links to be "detailed and informative".

For example the following questions were not shown:

1) I want my company match to be a Roth 401k account and my
contributions to be 401k (tax deductable). How do I set this up?
2) I want to convert my 401k to a Roth 401k. How do I accomplish this?
3) Can I contribute to both a roth IRA and a roth 401k?

I assume this is a way for the government to collect more taxes NOW.
With all the budget cuts and deficits, I'm assuming the gov't wanted to
find a way to tax more income now.

I visit several regularly that discuss this subject, here are some links:

http://roth-401k-forum.com/

http://www.rothira.com/#Message

http://www.roth401k-center.com/newforum/

--
Kathy Morgan EA
H & R Block Master Tax Advisor
Proud Mom of Sgt RT Morgan
1/156 AR BN C Company
Louisiana Army National Guard
Baghdad, Iraq
"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
news:nmd4e1l7c69lsc78293ge5giaep89b4r76[at]4ax.com...
- quote -

Roth option for 401k available in January.

Does anyone know a website that discusses the change... for example,
do all 401ks have to offer the choice, when, etc.?

-HW "Skip" Weldon
Columbia, SC