I am setting up a deductible business 401(k) plan , can I use the Roth choice or do I need a separate plan?

Answer 1

While you can set up a Roth 401(k) to allow your employees to contribute post tax, any company match amounts must be put in a seperate account. The match is pre-tax and must be put in a traditional 401(k).

So if you wish to set up the Roth plan you will need a regular plan also if your company will ever do a match.

Answer 2

Any ROTH plan is Post Tax money, you have already paid taxes on it and will not be taxed after 59 1/2 for withdrawing. A 401k is Pre-Tax money, a benefit to businesses who match their employees funds contributed. Go with the 401k or if you're a smaller business, a SIMPLE IRA. There are sooo many options. Speak with a financial advisor, they can go over them all with you. There is the newer ROTH 401k for employees also, but that would be a seperate plan.

Answer 3

You are confusing the two retirement plans. A ROTH is an IRA that a person funds themselves and tax is paid at the time of the contribution.

A 401K plan is an employer backed retirement plan that employees defer a portion of their income and the company matches a certain percentage. Contact American Funds.