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UPS Retirement Topics
401k, Am I doing this right?
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<blockquote data-quote="Ms.PacMan" data-source="post: 1775389" data-attributes="member: 4656"><p>Different from 401k----------->After tax contributions (up to 5% at UPS) in a 401k plan were devised as/ is a scheme to allow highly compensated employees access to a Roth IRA who are otherwise over the income guidelines. After tax contributions in a 401k can be rolled over into a Roth IRA (minus taxes paid on any gains and if the plan allows in-service rollovers), irregardless of a person's income.</p><p></p><p>This is not specific to UPS and you may remember that people were very curious during the last election as to how Mitt Romney had amassed so much money inside his Roth IRA's when he clearly made too much money to contribute anything. That's how and it's a perfectly legal loophole in the tax law!</p><p></p><p>After tax contributions are probably allowed in our plan because they are offered in the plan for mgmt. Unless you are maxed out on both the Roth 401k and a personal Roth IRA, after tax contributions aren't necessary.</p></blockquote><p></p>
[QUOTE="Ms.PacMan, post: 1775389, member: 4656"] Different from 401k----------->After tax contributions (up to 5% at UPS) in a 401k plan were devised as/ is a scheme to allow highly compensated employees access to a Roth IRA who are otherwise over the income guidelines. After tax contributions in a 401k can be rolled over into a Roth IRA (minus taxes paid on any gains and if the plan allows in-service rollovers), irregardless of a person's income. This is not specific to UPS and you may remember that people were very curious during the last election as to how Mitt Romney had amassed so much money inside his Roth IRA's when he clearly made too much money to contribute anything. That's how and it's a perfectly legal loophole in the tax law! After tax contributions are probably allowed in our plan because they are offered in the plan for mgmt. Unless you are maxed out on both the Roth 401k and a personal Roth IRA, after tax contributions aren't necessary. [/QUOTE]
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