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Feb 1, 2006 12:00 PM
A Gift from Uncle Sam
Staring in January, small business owners can line up to collect a gift from Uncle Sam. It's the Roth 401(k) and, according to financial advisors, it may be the best deal available for business owners who want to save on taxes in retirement and/or find ways to pass on wealth tax-free to heirs.
Indeed, some retirement-planning professionals think that the new Roth 401(k) is too good to be true — and are predicting that Congress will take it back. Like the earlier Roth IRA, the new Roth 401(k) allows an investor to accumulate tax-free returns and permits tax-free withdrawals. The big difference is that, unlike the individual Roth 401(k), the company sponsored Roth 401(k) does not have strict income limits ($95,000 for an individual and $150,000 for a couple), observes Barry Milberg, president of ERISA Expertise, a pension advisor and third-party administrator in Blue Bell, Pa., which recently launched a new business, roth401kinfo.com. Milberg figures that the new plans are such a good deal that they will not be renewed after their scheduled “sunset” in 2010.
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| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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