Consumers will soon be able to switch from a regular 401(k) to a Roth 401(k)

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  • rlsintx Plano, TX
    May 3, 2013 2:21 p.m.

    roth 401K you can withdraw your contribution amount without penalty at any age. If you withdraw enough that you hit the gains, you pay a 10% penalty on that portion which is gain, plus income tax on it. After the day when you turn 59 1/2, literally - not just the year in which it happens... those two items go away and it's all tax free withdrawal - contribution and gain. That's different than the 70 1/2 rule on IRA's where you must start taking distributions - that is the end of the year in which you reach the age - BIG difference.

  • Cinci Man FT MITCHELL, KY
    May 3, 2013 1:41 p.m.

    This was a pretty lame article. It explains absolutely nothing about how the switch works. Thanks for the worthless article. I read it thinking I would learn something, but nope...

  • rogerdpack2 Orem, UT
    May 3, 2013 9:03 a.m.

    roth 401(k) do have a penalty for early withdrawal--you have to pay "normal income tax" on the growth from your fund (ex: if you put in 90% and it has grown by 10%, you'll pay income tax on the 10%). If you with withdraw after 59.5 you don't have to pay income tax on the growth.