{"id":353114,"date":"2026-03-29T03:23:08","date_gmt":"2026-03-29T03:23:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/353114\/"},"modified":"2026-03-29T03:23:08","modified_gmt":"2026-03-29T03:23:08","slug":"roth-401k-accounts-no-longer-require-rmds-what-that-changes-for-your-strategy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/353114\/","title":{"rendered":"Roth 401(k) Accounts No Longer Require RMDs — What That Changes for Your Strategy"},"content":{"rendered":"

There was a time when Roth 401(k)s were not so easy to find. But these days, many employer-sponsored 401(k) plans offer a Roth savings feature. Not only that, but Roth 401(k)s are a lot more appealing now than they once were.<\/p>\n

It used to be that Roth 401(k)s forced savers to take required minimum distributions<\/a>, or RMDs. But that’s no longer the case. Now, Roth 401(k)s offer higher earners in particular a world of options.<\/p>\n

\"A<\/p>\n

Image source: Getty Images.<\/p>\n

The upside of losing the RMD requirement<\/p>\n

For years, Roth IRAs were the only type of tax-advantaged retirement account<\/a> to not force savers to take RMDs. But thanks to the SECURE 2.0 Act, a couple of years ago, Roth 401(k)s stopped requiring RMDs, too.<\/p>\n

That, frankly, is a game-changer for many savers — particularly higher earners.<\/p>\n

Roth IRAs<\/a> present two issues for higher earners. First, they have much lower contribution limits than 401(k) plans. Second, higher earners are barred from contributing directly.<\/p>\n

Roth 401(k)s solve both of these problems. Not only are the annual contribution limits much higher, but there are no income limits associated with Roth 401(k) eligibility.<\/p>\n

In fact, thanks to a new rule taking effect in 2026, workers 50 and older with an income of over $150,000 must make their catch-up contributions in a Roth 401(k). They’re no longer allowed to make catch-ups in a traditional 401(k).<\/p>\n

So all told, right now, Roth 401(k)s really are an optimal savings solution for higher earners. With the RMD requirement gone, they offer all the benefits of Roth IRAs — and much more.<\/p>\n

A savings option worth taking advantage of<\/p>\n

If you’re a higher earner, you may be in a pretty high tax bracket. So you might assume that it’s not worth funding a Roth 401(k), because you lose the up-front tax break on contributions.<\/p>\n

But if you expect to contribute generously to a retirement account each year, over time, that balance could grow significantly. With a Roth 401(k), any gains in your account are yours to enjoy completely tax-free.<\/p>\n

While you might assume you’ll be in a lower tax bracket in retirement than you are now, that’s not a given. A Roth 401(k) gives you the freedom to take tax-free withdrawals later in life, and it means you don’t have to worry about tax rates changing for the worse.<\/p>\n

All told, eliminating the RMD requirement is quite possibly the best change Roth 401(k)s have ever undergone. That’s something worth taking advantage of, especially if you’re someone who earns a higher paycheck.<\/p>\n","protected":false},"excerpt":{"rendered":"There was a time when Roth 401(k)s were not so easy to find. But these days, many employer-sponsored…\n","protected":false},"author":2,"featured_media":353115,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,246,111,139,69,244,245],"class_list":["post-353114","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-new-zealand","tag-newzealand","tag-nz","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/353114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=353114"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/353114\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/353115"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=353114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=353114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=353114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}