*Oaktree Financial Advisors is neither endorsed by nor affiliated with Eli Lilly
Effective January 1, 2012, Lilly will add a Roth feature to the current 401(k) plan. This new option allows you to contribute to your retirement savings with after-tax dollars. There are several reasons contributing after-tax dollars might be beneficial to you.
When you contribute after-tax dollars to your Roth 401(k), these assets will grow without being taxed. Likewise, when you withdraw these funds in retirement, they are not taxable. You must have had the Roth account for five years and be age 59½ or older to withdraw funds without tax and penalties.
Keep in mind that the company match provided on the first 6 percent of base salary that you contribute to the plan, up to IRS limits, is taxable and will always go into the pretax portion of your 401(k).
This is a great opportunity for those whose income prevents them from making a Roth IRA contribution. If you have questions or want to discuss whether this is right for you please give us a call