DETROIT, Feb. 28 (UPI) -- Auto parts supplier Delphi Corp. and General Motors Corp. will offer so-called Roth 401(k) retirement programs this summer.
Congress began allowing the program in January to encourage U.S. residents to save more, the Detroit News said Tuesday. Under a Roth 401(k), workers make contributions with after-tax dollars, which grow tax-free in an account. When employees reach either age 59 1/2 or have had the account for at least five years, they can withdraw the money tax-free.
A traditional 401(k) lets workers contribute pre-tax dollars, thereby lowering the income they're taxed on each year, but they pay taxes on the money when they take it out.
The Roth 401(k) will be offered as an option alongside the traditional 401(k) plans and other employee-directed savings plans by Delphi to 37,000 workers and GM to about 141,000 workers.
