4 Questions to Ask if You are Thinking About Using a ROTH 401k

Should you contribute to a ROTH 401k at work?  If you do, which funds should you choose?  Do you like randomly picking investments at work?

At www.smartmoney.com, they have a great article that talks about the advantages of a ROTH 401k.  First of all, it allows you to shelter after tax dollars and have your money grow tax-free.

According to www.your-roth-ira.com, you can contribute $5,500 (or $6,500 for over 50) for 2013 unless you make more that $112,000 ($178,000 if married filing jointly) to a ROTH.  According to 20somethingfinance.com, you can contribute $17,500 for 2013 to a ROTH 401(k) or regular 401(k).  These are the updated amounts for 2013.

So here are a few questions you should ask:

• Does your ROTH 401(k) allow early withdrawls of contributions for a house down payment?
• What is the maximum retirement contribution if you fund a ROTH 401(k)?
• Is there more control and lower fees when using an external ROTH IRA account?
• What will you do with the money long term and matched money when you change jobs?

This post was reposted from http://finlit.biz/retirement-2/4-questions-to-ask-if-you-are-thinking-about-using-a-roth-401k/, originally written on January 31st, 2013.