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Fans of the Roth IRA may want to think about acting on aprovision in the Economic Growth and Tax Relief Reconciliation Actof 2001 that lets employers offer employees a similarretirement-savings vehicle within their 401(k) plans beginning in2006.

As with a Roth IRA, a Roth 401(k) enables taxpayers tocontribute after-tax retirement savings that then grow and aredisbursed, tax-free, in retirement. Open to taxpayers at all incomelevels, Roth 401(k)s can be a powerful retirement tool for businessowners and employee participants, who are able to direct up to$15,000 into any combination of a regular 401(k) and the Roth401(k).

But they're not appropriate for everyone, cautions LawrenceMacklin, wealth strategist with The Private Bank of Bank ofAmerica. "Participants who are in low tax brackets currently,but who expect to be taxed at a higher rate in retirement, wouldlikely be better off in the Roth 401(k). But high-incomeindividuals paying the highest tax rates might be better off withthe regular 401(k) to benefit from a current tax deduction at thehigh rates."

Two further caveats may also hamper adoption. First, as fundscannot be mingled, managing Roth and traditional 401(k) accountswill add to an employer's administrative responsibilities.Also, since Roth 401(k) plans--along with other provisions calledfor in the EGTRRA--currently expire at the end of 2010, employersincur those costs with only four years of availability assured.