Using two examples, the CCA discusses a plan in which an employer offers all employees enrollment in a self-funded health plan, for which the employees pay a small, after-tax contribution
The Roth IRA after-tax contribution
limit for 2010 is $5,000, plus a catch-up contribution of $1,000 for those who have attained age 50 or higher.
Such after-tax contribution
provisions must meet the administratively complex nondiscrimination rules of Code section 401(m).
In contrast, assume the investment vehicle is one where the return is fully currently taxable and where PV is an after-tax contribution
Results for the fiscal 2004 quarter included a negative impact of $50 million from the southern California labor strike as well as a $5 million after-tax contribution
to two union multiemployer health and welfare plans in northern California.
Therefore, the after-tax contribution
feature of the Roth would allow an individual to save more money toward retirement, other things being equal.
The numerator of the fraction, which may be called the employee's investment, represented the retiree's after-tax contribution
to the plan.
Split 401(k) rollovers maximize after-tax contribution
For 403(b) plans with existing after-tax contributions
, many plan sponsors have discontinued the after-tax contribution
sources once a Roth feature was added.
While deferring wages up to this contribution limit is the goal for some clients, in order to truly maximize the 401(k) option, others have sought to take advantage of the after-tax contribution
limit as a means to eventually fund a Roth IRA.