For participants, NYLIM has a flyer entitled “Is a Roth 401(k) Right for You?” The flyer gives four scenarios a participant might fall into and gives the benefits as well as the downsides of a Roth 401(k) for that scenario.
The scenarios include:
- A New Saver, Single, in Their 20s, Annual Salary of $35,000 (25% tax bracket)
- A More Experienced Saver, Age 40, Single, Annual Salary of $100,000 (28% tax bracket)
- Saver Nearing Retirement, Age 60, Single or Married, Annual Salary of $200,000 (33% tax bracket)
- Saver Expecting to Be in a Lower Tax Bracket in Retirement
According to the flyer, the saver expecting to be in a lower tax bracket in retirement would not benefit from a Roth 401(k).
Plan sponsors will be able to offer the Roth 401(k) option as of January 1, 2006.
More information about NYLIM Retirement Plan Services can be found at www.nylim.com/retirement .