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I just found out that starting in 2010 my employer will start participating in a ROTH 401(K). To me this is very exciting news. Has anybody have experience with a ROTH 401 (K) and if so what has been your experience? Any help is appreciated.

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I have one, and it's fantastic for me. It's the same choice as an IRA vs. Roth IRA. It goes straight from your paycheck to your account (but taxes are taken out). I'm happy about it, it means that by paying taxes now, I'll be able to enjoy tax free growth. Do you have a specific question abut it?

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Daniel, thanks for the answer. Does your employer match on the Roth 401(K)? If so is it pre-tax or after tax? – The Balanced Spreadsheet Dec 11 at 12:31
Unfortunately we get no match. However, I'm pretty sure that all employer contributions must be mad pre-tax. We get profit sharing, part of it is distributed to our 401(k), and even if I make no traditional 401(k) contributions, the profit sharing bonus goes there. – Daniel Dec 11 at 12:54
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My 401(k)-type plan isn't a Roth but here are some things to consider:

  1. What choice of investment vehicles do you have? If your only choice is company stock, is the company sound? Regardless, ask yourself if you're carrying too many eggs in one basket.
  2. How much matching do you get? If it's nothing, that's a disadvantage. If it's up to X% of your salary, then any contributions over X% reduce the total return of your account, since your employer isn't chipping in anymore.
  3. Carefully consider the assumed advantages of the account. Rules can change at any time.
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