Post-Tax 401-K Contributions

Posted by Phil Marti on April 19, 2008, 4:45 pm

Please log in for more thread options

"John Kohl" wrote:

> Ah, let me explain a bit more. My employer's plan as of 2008 has a roth

> option, so my account now has pre-tax funds (my contributions and

> company match), after-tax funds (my contributions), and roth funds (my

> contributions).

Let's hope there are also some earnings.

> Whenever the time comes to roll out contents, it sounds like at least

> the Roth portion gets treated separately from the taxable/non-taxable

> sections, although the custodian mostly just lumps it all together for

> total valuation right now.

Since the Roth 401(k) option only began for you this year it may be too soon
for you to have seen exactly how the statements will look. What you need to
keep an eye out for is to make sure that the following items are
distinguishable:

1. Roth contributions
2. Roth earnings
3. After-tax "traditional" contributions
4. Everything else

Those four totals are all you'll need to know when it comes time to move
money out of the 401(k). (For the sake of simplicity I'm ignoring company
stock. If you have company stock in your 401(k) there's more accounting.)

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>