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Catch-Up Contributions: If It Ain’t Broke, Break It!

Adam C. Pozek 02/2/23
Adam C. Pozek | 02/02/23 Yeah, we know that’s not how the saying goes, but it appears Congress doesn’t.
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Roth, Roth and More Roth – as Far as the Eye Can See

Adam C. Pozek 01/31/23
Congress seems to be in a continual love fest with two retirement concepts – automatic enrollment and Roth contributions – and SECURE 2.0 (S2) continues the trend for both. I guess it’s not surprising. Automatic enrollment means more tax-deferred contributions (and, therefore, less tax revenue), whereas Roth contributions kick the tax can down the ...
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The Mega Backdoor Roth…Here We Go Again

DWC 07/29/21
Every year, the financial press seems to write about the so-called Backdoor Roth and Mega Backdoor Roth strategies in 401(k) plans, and this year is no exception. (Maybe the Super Duper Mega Backdoor Roth will be next year.) The difference is that the articles usually start to appear closer to the Fall, but they are trending earlier this time ...
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Can I Convert a Coronavirus-Related Distribution to a Roth IRA?

DWC 02/25/21
Facts We added Coronavirus-Related Distributions (CRDs) to our 401(k) plan in 2020, and a number of our participants availed themselves of the new feature. I know they have the option to pay any applicable taxes all at once or spread them over three years, and I also understand they have up to three years to roll the money over to avoid taxes ...
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Are There Plan Design Options We Should Consider as Part of the Mandatory Cycle 3 Plan Document Restatement?

DWC 11/10/20
Facts We’ve been following your recent posts about how making even small changes to certain plan provisions can make managing the plan easier without sacrificing our objectives. Making life easier, while minimizing chances for errors…you’ve really been speaking our language.
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Is It Possible to Convert a Pre-Tax 401(k) Account to a Roth Account?

DWC 08/6/19
Facts We recently had one of the participants in our 401(k) plan ask if it is possible to convert her balance from pre-tax to Roth. She has been a participant in our plan for many years and has both her own deferrals as well as company contributions (both match and profit sharing). Based on her current financial situation, she believes it would be ...
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After-Tax vs. Roth Contributions: What's the Difference?

DWC 06/19/18
Facts Our company has a 401(k) plan that provides a matching contribution equal to 100% of the first 4% that each employee contributes. We set it up that way to ensure that our highly compensated employees (HCEs) can maximize their salary deferrals at the limit (for 2018 the limit is $18,500 for those under age 50 and $24,500 for those age 50 or ...
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What Are The Different Types of 401(k) Contributions And How Do They Work?

DWC 03/27/18
Facts Our business is considering setting up a 401(k) plan for our employees. We know that it can include both employee contributions and company contributions, but we keep hearing about all sorts of other contributions. There are profit-sharing contributions, matching contributions, qualified nonelective contributions, and Roth contributions.
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DWC in Kiplinger: Leveraging a Backdoor Roth IRA

DWC 12/28/17
If Roth IRAs offer a legitimate long-term savings strategy by allowing people to generate tax-free income, why do less than a third of IRA investors have such an account? The short answer is income limits; taxpayers above certain levels can't invest directly into a Roth IRA.
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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.