Paychex Adds Roth 401k Option
ROCHESTER, NY, October 2, 2006 -- Paychex, Inc. has added a Roth 401k feature to its suite of retirement services. The Paychex Roth 401k feature offers small and medium-sized businesses another way to save for retirement. Roth 401k contributions are funded with after-tax dollars, but withdrawals can generally be tax-free when withdrawn at retirement. With a traditional pre-tax 401k, participants contribute with pre-tax wages, and then pay taxes when the money is withdrawn.
The Paychex Roth 401k feature is another tool that plan sponsors and their participants can use to create a broader retirement planning package.
"The Roth 401k may be the right savings vehicle for newly hired and younger workers who are in a lower tax bracket now, but expect their income and tax burden to grow as their career progresses," said Tony Tortorella, Paychex Human Resource Services vice president of sales. "The Roth may also be a good fit for highly paid workers who want to manage their tax burden in retirement. For employers looking to add the Roth 401k feature to their plans, Paychex 401k Recordkeeping service seamlessly handles the integration between payroll and 401k deductions."
Workers may contribute a maximum of $15,000 during 2006 to qualified retirement plans; those over 50 may make an additional $5,000 catch-up contribution. The amounts contributed can be divided in any manner between the pre-tax and Roth contributions. Unlike a Roth IRA, there are no income restrictions for individuals making contributions to a Roth 401k. The Roth 401k was created by the Economic Growth and Tax Reconciliation Act of 2001, and made permanent by the newly signed Pension Protection Act of 2006.
Paychex's retirement services are designed to meet the needs of small- to medium-sized businesses and include traditional and Roth 401k, 401k safe harbor, owner-only 401k, 401k SIMPLE, SIMPLE IRA, and profit-sharing plans. Additional information is available on the Paychex Web site at http://www.paychex.com.
About Paychex
Paychex, Inc. (NASDAQ:PAYX) is a leading provider of payroll, human resource, and benefits outsourcing solutions for small- to medium-sized businesses. The company offers comprehensive payroll services, including payroll processing, payroll tax administration, and employee pay services, including direct deposit, check signing, and Readychex®. Human resource and benefits outsourcing services include 401k plan recordkeeping, workers' compensation administration, section 125 plans, a professional employer organization, time and attendance solutions and other administrative services for business. Paychex was founded in 1971. With headquarters in Rochester, New York, the company has more than 100 offices and serves approximately 543,000 payroll clients nationwide.
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