vNEW RETIREMENT OPTIONS: THE ROTH 401K

ANCHOR LEAD IN:
EVER SINCE COMPANIES STARTED PHASING OUT PENSION PLANS, RETIREMENT SAVING HAS GOTTEN MUCH MORE COMPLICATED FOR US REGULAR FOLKS. NOW, A NEW AND VERY DIFFERENT 401-K PLAN IS ABOUT TO ENTER THE EQUATION...AND IN TODAY'S HEADS UP, _________ HELPS YOU ADD UP THE PROS AND CONS OF INVESTING YOUR MONEY IN THIS LATEST RETIREMENT OPTION.

TRACK ONE Length: :06
THIRTY-FOUR YEAR OLD TRIP LEONARD IS TRYING TO SAVE WISELY FOR HIS FAMILY'S FUTURE...

SOT
KEY @ : :07 Trip Leonard, Title: www.musingmoney.com blogger
"We have 401Ks, we have some traditional IRAs and some taxable accounts, all in mutual funds."

TRACK TWO Length: :13
BEGINNING NEXT MONTH, MANY PEOPLE WILL HAVE A NEW OPTION. IT'S THE ROTH 401-K.
WITH TRADITIONAL 401-K PLANS, YOUR INITIAL INVESTMENT AND EARNINGS ARE TAX-FREE UNTIL YOU TAKE YOUR MONEY OUT. THE ROTH 401-K IS JUST THE OPPOSITE.

SOT
KEY @ : :29 David Wray, President, Profit Sharing 401(K) Council of America (PSCA)
"You pay tax on the contribution on the plan, but you don't pay tax on the earnings when you withdraw the money."

TRACK THREE Length: 21
SO, HOW DOES IT ALL ADD UP? IF A 30-YEAR OLD CONTRIBUTES 10-THOUSAND DOLLARS A YEAR, HE'LL HAVE ABOUT ONE AND A HALF MILLION DOLLARS AT RETIREMENT. WITH THE ROTH 401 K, THE TAXES WOULD HAVE ALREADY BEEN PAID. WITH THE TRADITIONAL PLAN, HE'D OWE NEARLY 400-THOUSAND DOLLARS IN TAXES.
BUT, THE DOWNSIDE IS YOU CAN'T DEDUCT ROTH 401-K CONTRIBUTIONS FROM CURRENT TAX RETURNS...

SOT
KEY @ : Trip Leonard, www.musingmoney.com blogger
"Our adjusted gross income will increase, and I need to see if that will move us into a higher tax bracket."

TRACK FOUR Length: :07
ROTH 401-Ks ARE OPEN TO ANYONE WHOSE EMPLOYER OFFERS THEM, REGARDLESS OF INCOME. BUT ARE THEY A WISE MOVE FOR EVERYONE?

SOT
KEY @ : 1:12 David Wray, President, Profit Sharing 401(K) Council of America (PSCA)
"The Roth benefit is for people who have lower tax brackets when they're making their contribution, and higher tax brackets when they're taking their money out."

TRACK FIVE Length: :09
ANTICIPATING YOUR FUTURE TAX BRACKET ISN'T ALWAYS EASY. LEONARD, A STAY-AT-HOME DAD,COULD BE BACK IN THE WORK FORCE SOME DAY. WHAT'S MORE...

SOT
KEY @ : 1:29 David Wray, President, Profit Sharing 401(K) Council of America (PSCA)
"It's very hard to determine what tax rates and tax structures are going to be 20 years from now."

ANCHOR TAG:
Source: http://www.psca.org/PRESS/P2005/Oct26.html
THE ROTH 401K PLAN IS BRAND NEW AND WRAY SAYS NOT ALL EMPLOYERS ARE PLANNING TO OFFER IT YET. HIS ORGANIZATION RECENTLY CONDUCTED A MINI-SURVEY AND FOUND THAT ABOUT 17-PERCENT OF RESPONDENTS INTEND TO ADD THE OPTION FOR EMPLOYEES. AND, ABOUT TWICE THAT NUMBER ARE STILLCONSIDERING IT.

SOURCE INFO

David Wray
PSCA.org
312-419-1863
davidw@pwca.org

Trip Leonard
www.musingmoney.com
303-393-6725