Posted by: Gary Thompson | November 15, 2012

THE FISCAL CLIFF AND YOUR 401K

You may or may not be aware that several Bush era tax cuts are scheduled to expire at the end of the year.  Many are referring to this as the looming ‘fiscal cliff’.  This will impact all of us in different ways.  Yes, all of us.  One thing you may wish to consider and seek guidance from your tax advisor is to convert your current funds to a Roth within your 401k or IRA.

The concept of a Roth 401k (and IRA) is an excellent retirement choice for saving money.  This allows you to put in money on an after tax basis and withdraw it tax free at retirement.  A traditional 401k allows you to make pretax contributions, but the withdrawals are taxed.  The reason you may wish to consider converting your existing plan to a Roth is to avoid the projected tax increases when you are ready to withdraw your funds.  The attached article explains the difference in a traditional and Roth 401k in more detail.  If you have any questions please feel free to let me know.

I encourage everyone to read in detail about the looming fiscal cliff.at www.cfr.org. I found the information at this link to be helpful.

Here is a link to a helpful article “Savings Fitness – Employee Guide to the Roth 401K”

If you would like more information about this and other topics please follow this blog and visit our web site www.ChappellSmith.com or don’t hesitate to call Gary at 800.999.1109.

Disclaimer: Myself nor CS&A is offering financial advice rather encouraging everyone to consult a qualified tax advisor to see if this option is right for you.  Education is the enemy of ignorance.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: