Personal Finance Tip for Twenty Something Workers!

A Roth 401(k) may be an excellent option for younger workers. I am a big advocate of Roth’s because I do believe that tax rates have no where to go but up! According to a recent Hewitt survey nearly 14% of workers in their 20s selected the Roth 401(k) when it was available. Good choice!

Sandra Block covers all the details in her Your Money article today called Twentysomething workers have right idea about investing in Roth 401(k)
PS That was my dog Boomer bringing the news!

Steve Mertz
Roth’s Are a Great Investment Vehicle

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5 Responses to “Personal Finance Tip for Twenty Something Workers!”

  1. Kira says:

    When I first started my job I emailed the HR department to find out if they would auto deduct for an IRA (I didn’t know that they don’t do that.) I really wish they’d open the Roth 403(b)s here, I think it’s a great idea.

  2. Anonymous says:

    I think the Roth 401k is the worst thing ever because it is one big scam.

    How? It’s interesting that the government opted to “create” this vehicle now that there is close to 80 million people retiring over the next 12 years. The government doesn’t have enough money to pay for Medicaid, Medicare, Social Security, etc so guess what they’re gonna do?

    You think you’re going to get all that ROTH 401k money you’ve been growing for the past 10, 20, 30 years all tax free? You grow that 401k from $1000 to $1 million and you’re gonna walk away with it all tax free? Guess again sucker, the rules will change (especially if there is Democratic congress) and you will pay taxes TWICE.

    Don’t think there is double taxation in the US? Just look at the Estate Tax, Dividend Tax, S Corp Tax (on income and distribution) and you begin to see the picture.

    Yeah, it’s a great idea IF the rules don’t change but they will so that makes it suck big time!

  3. Steve Mertz says:

    If the rules changed without any notice and without any grand fathering then it would be a bust. My experince has always been that you get grandfathered-if you are in by a certain date. The best thing the government ever did to keep track of taxes is to create pre-tax 401(k)s and IRA’s-they know exactly where the dough is and tax the bejesus out of it!

  4. Jason Paris says:

    I sat down awhile back and wrote a blog called Roth 401(k) The IRS’s error compounded. When I sat there writing it I was remembering years ago when I got into the financial world and learned about the Roth IRA.
    The anonymous comment here surprises me. I don’t think our government is tricking people into some scheme to make them pay more taxes. It’s not that I’m under any delusions about the goodness of our government. I just don’t think they are that far sighted. On the contrary, if history has taught us anything it’s that our government is very shortsighted.
    Make no mistake. I think when people start retireing there will me a review of this rule and it will be done away with but until then I say take advantage of it.
    Feel free to respond on my blog if you’d like:

  5. Steve Mertz says:

    I agree with you Jason. The Roth is one of the most powerful wealth builders that I am personally aware of!

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