⌐ AV8OR WANNABE

I thought we were gonna get ROTH 401K at UPS (not ROTH IRA)? Any ideas if it's true and if so how soon?

Rocket Bob

Plan literature for roth 401k came in the mail yesterday, haven't really heard a lot about it....

Freightpuppy

Anyone know how it works? Are the limits (as in income) the same as a Roth IRA?

rolling thunder

No income limit. You can divide the 16,000 limit for 401k in 07 between the traditional or the roth. All employees at Fedex have the roth 401k available except the pilots. I think the roth 401k is where to put the money for the younger guys.

flyinboxes

I think its a good deal also. We are getting it as an option at Astar/DHL as well. I haven't seen the literature yet but the no income limit is a great deal.

⌐ AV8OR WANNABE

Ok, so here I am replying to my own question...

I just received the 401K Roth info. Basically 401K and Roth 401K work exactly the same way except you choose when you want to pay your taxes by selecting the respective plan.

If you save in a "regular" 401K plan you’ll pay later - when you retire; if you save in a Roth 401K plan you’ll pay now but once you retire there won’t be any taxes on it (of course - this assumes Hillary and then Chelsea won't become our next presidents because then all the bets are off! )

In general pilots with many years to go and especially the ones who are still making "small" bucks are better off with Roth 401K. Also, Roth 401k is great if you want to leave some money to your kids, grandkids, etc because there won't be any inheritance tax on it - it's been paid already!).

At least that's what “my” financial guru - Dave Ramsey (sp?) always says – he’s been a big proponent of those plans for quite some times.

So as of July I'll be saving in Roth 401K instead of the regular 401K. Well, Dave Ramsay is not the only reason I’ll be doing it – my accountant recommended it as well.

⌐ AV8OR WANNABE

Freight puppy - no income limits - that's one of the beauties of this plan. You should definitely benefit form it based on your age - and I do know your age! LOL

Here's a good link explaining the pro's and con's of each plan.

Freighter Captain

So, in order to contribute $15,000 of after tax dollars to the plan, I'll have to gross close to $25,000 into the plan. Correct?

crewdawg

Deleted------The link answered my question. Employer's contributions can't be put into the Roth 401k but must be put into the traditional 401k.

⌐ AV8OR WANNABE

Ok, I received the Roth 401K information mailed to me just like everyone else but found out that apparently the Fidelity Roth 401K phone number printed on the brochure was incorrect.

However, if anyone’s interested, I just switched my withdrawals from regular 401K to the Roth 401K online and it is much easier than I thought. Afterwards, I even called Fidelity (found a different number) to verify I followed the procedures correctly and was told everything is set up correctly and will kick in ~2 weeks from now.

I couldn’t remember the NetBenefits web address so I signed into my Fidelity.com account instead; then I clicked on UPS/IPA 401K SAVINGS link, followed by NetBenefits link on the right side of the screen.

Now I chose UPS/IPA 401K SAVINGS again, clicked on Payroll Deductions (lower, left corner) followed by Regular Deductions link.
Here I changed 401(K) ACCOUNT to 0% and selected ROTH BASIC (our new choice) to 20% (maximum is 35%).

That’s it!

I keep saving in the very same mutual funds as before but now it’s post tax, so when I retire it’ll be tax free
(the portion saved in the Roth Basic account).

Good luck.