Question: When an employee has a Roth 4 0 1 ( k ) with an employer match, how are the employer's matching funds applied? Multiple choice

When an employee has a Roth 401(k) with an employer match, how are the employer's matching funds applied?
Multiple choice question.
The matching funds must be put in a traditional 401(k) for the employee because employers can NOT make contributions to a Roth 401(k).
The employee can elect to pay income tax on the amount of the employer's contribution, so that the matching funds can be applied in the Roth 401(k).
The employer is able to invest the matching funds directly into the employees' chosen investments for their Roth 401(k)'s.
The employee will lose the matching funds if a Roth 401(k) is chosen because the employer is NOT allowed to invest in that type of account.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!