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I did it in June. I looked at all the different slants on retiring early vs. working longer for a bigger monthly payment, and decided to retire (and work PT) while I was still healthy enough to enjoy it. For me it wasn't a financial decision, but a life decision.
  • Getting A Roth 401k 0 comments
    Mar 31, 2013 7:56 AM

    We (the 401k Committee) will be meeting the 23rd of April to discuss adding a Roth version of our current 401k. The plan does indeed allow for a Roth version, and I've begun to investigate what the problems might be with the plan set-up. Individual tax strategies are way too complex to cover everything, and there are plenty of "Roth vs traditional" 401k articles already written, and lots of on line calculators for figuring out which is best for you. I'm looking to add that component to my retirement pie so I have even more options. I do like back-up plans, and as that ancient proverb I made up this morning goes: Nobody ever retired with too much money. Regardless of what the plan will ultimately offer, I'd plan on rolling it into my Roth IRA when I retire to avoid some of the required withdrawals at 70 and a half and be able to structure the holdings according to what I need.

    So far the only ointment fly I found is the company match angle. Since the company component is always taxable because we never see it, it looks like 2 sister plans would be the best- contribute to the traditional 401 up to the company match, and then balance of contribution with no match into the Roth. Otherwise there will be a taxable component to your "tax free" distribution (the company match), and in addition to back up plans, I like things not very complicated, and I'm going to guess that the simpler the plan is, the better the administrator will like it.

    Is anybody aware of any other pitfalls with the plan set up? Any "look out fors" or "be careful ofs"? I'd love to be on top of the plan construction aspect of this, so if you have experience or are aware of how I might avoid successfully shooting myself in the foot, please let me know.


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