RMI-3011 Lecture Notes - Lecture 13: Employee Retirement Income Security Act, Pension Protection Act Of 2006, Pension
28 Nov 2017
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In a roth 401(k) plan, you make contributions with after-tax dollars, and qualified distributions at retirement are received income-tax free. It is limited to self-employed individuals with no employees other than a spouse: for 2012, the maximum annual contribution is limited to 25 percent of compensation. In addition, the business owner can elect a salary deferral up to ,000, which reduces taxable income: workers over age 50 can make an additional catch-up contribution of. In 2012, the maximum limit on elective deferrals for workers under age 50 is. ,000: employees age 50 and older can make an additional catch-up contribution of , employers have the option of allowing employees to invest in a roth 403(b) plan. Investment income accumulates on a tax-deferred basis funds are distributed: the maximum annual contribution into a defined-contribution keogh plan is limited to 20% of net earnings after subtracting of the social.
