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November 23, 2005


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I thought I read an IRS statement that employer matches HAD to be kept in a conventional 401(k). Certainly makes sense...

There's plenty of unseen complexity in the Roth 401k. Hopefully those in the vanguard will explore that for the rest of us (yes, Vanguard-administered plans have the option of adding a Roth, at the employer's request; if your employer uses Vanguard I recommend asking about it).

The advantages of a roth are many, and only start with tax diversification.



A friend of mine who's a little more interested in doing the math has told me that I should put money into my regular 401k plan until the company match is maxed out, then put the next amount into the Roth 401k, and after reaching the limit there, put the rest into the regular plan again until I'm finished maxing it out.

Is this sensible or dependent on the treatment of the company match?


I'm not sure. In fact, I haven't even had a chance yet to sort out my personal opinion on the Roth 401k vs. the regular 401k. But I'm sure many sites have. I recommend you google the topic and see what comes up.

Good luck.

Other primary concerns are with payroll companies/internal payroll systems being able to separate contributions between taxable (Roth) and pre-tax (Traditional). The match is an administrative issue as well.

More importantly is how distributions will be handled. This includes normal, pre-mature (59 1/2), loans, hardship, etc.

These are being pressed on the public for January 1, 2006 effectives by fund families and attorneys. It does have advantages but a wait and see is not a bad approach until you've questioned your providers.

made professionally. So to hold

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