The Online 401(k) launches Roth 401(k) option for small businesses Roth option no longer a feature reserved for large corporations

The Online 401(k)’s Roth 401(k) option gives small businesses and their employees more choices

SAN FRANCISCO (April 18, 2006) – The Online 401(k), (www.theonline401k.com), the leading provider of full-service Web-based 401(k) plans for small and single-person businesses, today announced the rollout of a Roth 401(k) feature for its flagship product, The Online 401(k).

The new Roth 401(k) feature will allow small businesses and their employees to make contributions to their retirement plan with after-tax dollars, compared to a traditional 401(k) plan, in which employee contributions are made with before-tax dollars.  

A Roth 401(k) has more advantages than a Roth 401(k) as it allows formuch higher annual contribution amounts than a Roth IRA— up to $15,000 to $20,000 (if over age 50) in the 2006 tax year versus just $5,000 for a Roth IRA.

Usually options such as a Roth 401(k) are available only to bigger businesses with a larger asset base. However, through The Online 401(k), this valuable feature is now accessible to small businesses, at no additional cost.

The process of adding a Roth 401(k) feature to a new or existing 401(k) plan with The Online 401(k) is very easy and will require very little effort from the small business owner.

In addition, there are no operational or regulatory burdens associated with adding a Roth 401(k) feature to a 401(k) plan with The Online 401(k). The Online 401(k) will be offering a wealth of educational material, including an interactive Roth calculator, to small business owners as well as employees in order to help them decide whether or not to use the Roth option.

The Roth feature might be more appropriate for employees in the following scenarios:

• Employees who will be a higher income tax bracket at retirement: Those that will be taxed at a higher rate when they retire may consider the Roth, since it is taxed upfront at the time of contribution.



• Employees with a large balance in a traditional 401(k) account: A Roth option will allow them to “hedge” their bet on future tax rates and allow the flexibility to make taxable and non-taxable withdrawals in retirement.

Chad Parks, CFP^® and CEO of Decimal says, “Launching an exciting new feature such as the Roth 401(k) is a major milestone. We are pleased we can continue to bring big-business flexibility and choice to our small business clients at no extra cost.”

About The Online 401(k)
Small businesses interested in learning more about The Online 401(k) can request a quote at www.theonline401k.com and automatically receive a customized proposal via e-mail.  Small businesses can easily establish their 401(k) plan, thanks to a streamlined plan adoption process. The Online 401(k) offers a wide variety of investments to choose from on multiple platforms. Once the 401(k) plan is set up, employees can access 401(k) and investment education, select their investments and manage their individual 401(k) accounts – all from the convenience of their desktop.

E-mail us at press@theonline401k.com
or call us at 877.775.401k.