While most of us will never see a pension, the IRS has been expanding the opportunities for retirement savings using your 401(k) plan. Initially, there was only the opportunity to defer some of your salary into the plan in pre-tax dollars. That would allow the contribution — including the amount that would otherwise be paid in tax — to increase due to investment experience and allow the earnings to compound over the life of the account. Many employers tie the company contribution to the salary deferrals — offering a match — so that electing to defer salary results in an effective “return” on the contribution before it is even invested — essentially “free money.”
If you thought a Roth IRA was out of the picture for you, think again.
Employers sponsoring 401(k) plans have been hearing from their investment advisors about “fee disclosures” that have to be given to plan participants who choose their own investments in the company plan. The goal of these IRS regulations, now effective July 1, 2012, after having been delayed several times, is to arm investors with information about …Read More