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Does anyone know about the new Roth 401(k)s that are going to be permitted starting in 06? They are like a 401(k)s but they are from post-tax rather than pre-tax earnings. Your limits are going to be $15,000 total for both types of account, e.g., you can have a max of $15,000 total between the two accounts.

I am 47, currently in the 25% tax bracket and have been maxing out my 401(k) every year, although my employer does not match. I've heard Suze Orman say that with tax rates at an all time low, and with taxes likely to rise in the future because of the rising deficits etc., if your 401(k) doesn't match, it's not worth using the 401(k) - take the post-tax money and invest it elsewhere. I'm not sure I understand how withdrawing from 401(k)s works and how you are taxed on it, and I understand that there are different possible tax scenarios for the future, so I'm not sure whether to act on that advice or not.

So, if my employer starts offering the new Roth 401(k), I am thinking of splitting my contributions between the two types of 401(k), to sort of hedge my bets. If not, I'm trying to decide whether to start not contributing to the 401(k) at all and start putting the money that's put back into my paycheck into an investment account.

Any thoughts?
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