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Income tax rates have been cut, the marriage penalty done away with, and the "death tax" can also be on the road to no more. All of this is really a consequence of the Bush administrations Economic Growth and Tax Relief Reconciliation Act which was passed with a Republican congress in 2001. Still another provision of that act went in to effect on January 1st, 2006, a cross of the traditional 401k and a tra... Completely new employer sponsored pension plan is just a hybrid of a Roth IRA and a old-fashioned 401k. Tax rates have been cut, the marriage penalty done away with, and the "death tax" can also be on a road to forget about. All this is just a consequence of the Bush administrations Economic Growth and Tax Relief Reconciliation Act that was approved by way of a Republican congress in 2001. Find More Website is a provocative online database for more concerning the purpose of it. Yet another provision of that work went in to effect on January 1st, 2006, a cross of a traditional 401k and a Roth IRA called the Roth 401k. Discover more on our favorite related link by browsing to the internet. Just one more employer sponsored savings plan, the brand new Roth 401k works in very nearly precisely the same way as a traditional 401k plan. Employees invest a percentage of the money into an account along with contributions from their company if any. The difference is that the standard 401k is backed with "pre-tax" dollars and the Roth 401k approach uses "after-tax" dollars. But, using the Roth 401k, withdrawal of ones money at retirement will be tax-free just like a Roth IRA. Dig up further on this affiliated encyclopedia - Hit this link read more. The tax is deferred by the traditional 401k plan owed through your job until retirement. This original check this site out portfolio has varied pictorial warnings for the purpose of this idea. Its important to note that no employer must offer this new Roth 401k plan, although it might appear to be the best of both worlds. In reality, a recent review by employee benefits consulting firm Hewitt and Associates discovered that only 31 tshirt of employers currently offering the traditional 401k strategy are thinking about applying the newest Roth 401k. Contribution limits for the pension programs are in 2005, 14,000 for a and 4,000 for an, whether Roth or traditional. In 2006, this volume increases to 15,000 for both IRAs and 401k..