Who Would Likely Benefit?
* People who believe taxes will be greater in the future
* Young investors who believe they will be in a higher tax bracket in the future
* Investors who do not qualify for the Roth IRA due to income limit
* Low income investors who are tax-exempt
* Investors who use Roth 401(k) as a planning tool in conjunction with traditional 401(k) plans
* Allows participants to hedge against risk of higher future tax rates
Who Would Likely Not Benefit?
* People certain that future tax rates will decrease
* People expecting to experience a significant drop in income upon retirement
* People with high temporary income
* People needing access to their funds within the first five years of deferrals
In summary, Roth retirement plan contributions have potential to allow individuals more flexibility in saving for retirement, whereby giving investors more control over the taxable alternatives. MCF recommends a cautious approach when weighing the pros and cons.
For more information, Contact your MCF Financial Advisor, today!
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