The Online 401k Launches Roth 401k Option
SAN FRANCISCO, CA, April 19, 2006 -- The Online 401k, (www.theonline401k.com), the leading provider of full-service Web-based 401k plans for small and single-person businesses, today announced the rollout of a Roth 401k feature for its flagship product, The Online 401k.
The new Roth 401k feature will allow small businesses and their employees to make contributions to their retirement plan with after-tax dollars, compared to a traditional 401k plan, in which employee contributions are made with before-tax dollars.
A Roth 401k has more advantages than a traditional 401k as it allows for much higher annual contribution amounts— up to $15,000 to $20,000 (if over age 50) in the 2006 tax year versus just $5,000 for a Traditional IRA.
Usually options such as a Roth 401k are available only to bigger businesses with a larger asset base. However, through The Online 401k, this valuable feature is now accessible to small businesses, at no additional cost.
The process of adding a Roth 401k feature to a new or existing 401k plan with The Online 401k is very easy and will require very little effort from the small business owner.
In addition, there are no operational or regulatory burdens associated with adding a Roth 401k feature to a 401k plan with The Online 401k. The Online 401k will be offering a wealth of educational material, including an interactive Roth calculator, to small business owners as well as employees in order to help them decide whether or not to use the Roth option.
The Roth feature might be more appropriate for employees in the following scenarios:
- Employees who will be a higher income tax bracket at retirement. Those that will be taxed at a higher rate when they retire may consider the Roth, since it is taxed upfront at the time of contribution.
- Employees with a large balance in a traditional 401k account. A Roth option will allow them to "hedge" their bet on future tax rates and allow the flexibility to make taxable and non-taxable withdrawals in retirement.
Chad Parks, CFP® and CEO of Decimal says, "Launching an exciting new feature such as the Roth 401k is a major milestone. We are pleased we can continue to bring big-business flexibility and choice to our small business clients at no extra cost."
About The Online 401k
Small businesses interested in learning more about The Online 401k™ can request a quote at http://www.theonline401k.com and automatically receive a customized proposal via e-mail. Small businesses can easily establish their 401k plan, thanks to a streamlined plan adoption process. The Online 401k offers a wide variety of investments to choose from on multiple platforms. Once the 401k plan is set up, employees can access 401k and investment education, select their investments and manage their individual 401k accounts – all from the convenience of their desktop. For more information on The Online 401k, please visit www.theonline401k.com.
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