Acme Inc., is establishing a retirement plan and they want a plan that includes

Question

Acme Inc., is establishing a retirement plan and they want a plan that includes a Roth account. Which of the following statements is correct about Roth accounts?

a. Matching contributions can be contributed to Roth account.

b. Amounts in a traditional 401(k) plan cannot be rolled over to a Roth account.

c. Roth accounts do not require minimum distributions until after the death of the participant.

d. Roth accounts permit access for taxpayers who may otherwise not be able to contribute to a Roth IRA.

Explanation / Answer

Ans. Is b. Amounts in a traditional 401(k) plan cannot be rolled over to a Roth account.

Explanation: Roth accounts is a feature in new or existing 401(k), 403(b) and governmental 457(b) and separate establishment is necessary for these roth accounts. Roth accounts doesn’t permit employer to contribute matching contribution and also minimum distribution is necessary in Roth accounts. Roth accounts can not be opened by anyone only participants of 401(k), 403(b) and 457(b) is allowed. Also since it require separate establishment rollover is not permissible so option b is true.

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