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Learning, Sharing, and Teaching => Investor Alley => Topic started by: pjrichar on March 10, 2016, 11:26:13 AM

Title: Roth 401k - Employer Match Changes in 2016?
Post by: pjrichar on March 10, 2016, 11:26:13 AM
I was listening to some investing radio show the other day and I swear I heard them say that the IRS rules changed for 2016 that would allow employees to choose whether the employer matching contributions were added as Roth or pre-tax instead of before requiring that the match be pre-tax. I have been googling it, but haven't been able to find anything. Has anyone heard or read anything on this? If so, would you be able to provide me with a link?

Thanks!
Title: Re: Roth 401k - Employer Match Changes in 2016?
Post by: Old Man Mase on March 11, 2016, 08:41:07 AM
I heard Dave Ramsey say something like this a few weeks back.  I remember it because i remember thinking wow, this could be a big deal.  Then a few days later i was listening to his show again and he actually apologized and made a correction, saying that the company match portion still has to be pre-tax instead of Roth.  I wouldn't be surprised if the IRS allowed something like this in the future though.
Title: Re: Roth 401k - Employer Match Changes in 2016?
Post by: Proud Foot on March 11, 2016, 10:23:58 AM
It would be nice if this were to happen.  I think to make it work the IRS would probably make the match taxable in the year received or vested. If in the year received there should be a way to recapture this if you lost a portion due to not being fully vested upon termination.  I don't see any way they would let the match go completely untaxed.
Title: Re: Roth 401k - Employer Match Changes in 2016?
Post by: onlykelsey on March 11, 2016, 10:29:18 AM
I would just like to HAVE a 401(k) match for the first time in my life.  I imagine they'll only become less common over time.