Transcript

Roth Comparison Chart

Torad ROTH COMPARISON CHART Comparison of Roth 401 (k), Roth IRA, and Traditional 401 (k) Retirement ACcounts DESIGNATED TRADITIONAL, ROTH 401 (K) ROTH IRA PRE-TAX 401(K) ACCOUNT ACCOUNT CONTRIBUTIONS Traditional, pre-tax elective contributions are Designated Roth employee Roth IRA contributions are loyee elective contributions are made with after-tax dollars. made with after-tax dollars. made with before-tax dollars. SJ INCOME LIMITS No income limitation to Income limits: No income limitation to participate. participate. • 2013- modified AGI married $188,000/single $127,000 • 2014 - modified AGI married $191,000/single $129,000 MAXIMUM ELECTIVE CONTRIBUTION Aggregate* employee Contribution limited to $5,500 for 2013 and 2014 plus an additional $1,000 for employees age 50 or over. Same aggregate* limit as Designated Roth 401 (k) elective contributions limited to $17,500 in 2013 and 2014 plus an additional $5,500 for employees age 50 or over. Account TAXATION OF WITHDRAWALS Withdrawals of contributions Withdrawals of contributions and earnings are not taxed provided it's a qualified distribution – the account is Same as Designated Roth 401(k) Account and can have a qualified distribution for a first time home purchase. and earnings are subject to Federal and most State income taxes. held for at least 5 years and made: • On account of disability • On or after death, or • On or after attainment of age 59½ REQUIRED DISTRIBUTIONS Distributions must begin no No requirement to start taking distributions while Same as Designated Roth 401 (k) Account. later than age 702, unless still working and not a 5% owner is alive. owner. * This limitation is by individual, rather than by plan. Although permissible to split the annual employee elective contribution between designated Roth contributions and traditional, pre-tax contributions, the combination cannot exceed the deferral limit - $17,500/$23,000 in 2013 and 2014. YGrad

Roth Comparison Chart

shared by iGrad on Apr 22
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Do you understand the differences between a Designated Roth 401(k), Roth IRA and a Traditional Pre-Tax 401(K) Account? A friendly visual breakdown of some of the key differences for these popular reti...

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iGrad

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Economy
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