Starting in mid-January, Roth contributions will be available to you through the JHU retirement plan with TIAA.
With the Roth option, your contribution is taken out of your paycheck after your income is taxed; this does not lower your current taxable income. Your after-tax contributions and the earnings on them are tax-free upon withdrawal in retirement, provided certain conditions are met.
Roth contributions require a separate election from your pretax salary deferral, and you can start or stop your contributions to the plan at any time.
A Roth option might be right for you if you:
- Are just starting your career and are in a lower tax bracket than you expect to be at retirement
- Want to make Roth contributions that are greater than the Roth IRA contribution limit
- Are not eligible to make Roth IRA contributions because your income exceeds the limits
- Believe your income tax rates are likely to rise in the future
- Want to hedge against the uncertainty of future tax rates by having both pretax and after-tax assets in your retirement account
- Are interested in passing on a portion of your retirement assets tax-free to your heirs
When it comes to choosing a retirement savings plan, there is no one-size-fits-all as many factors may come into play. Because of this, it's important to look at your specific financial situation to determine whether a Roth 403(b) is right for you.
To learn more, join Marsh McLennan Agency at noon on Thursday, Jan. 12, for an educational webinar on the new Roth option. Click here to register.
You also can log into MMA's Prosper Wise site to schedule a free one-on-one financial coaching session for a complete retirement checkup and to see if the Roth option is best for you.