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Roth 401(k)s and 403(b)s

Roth contributions to 401(k) and 403(b) retirement plans became available on January 1, 2006.

Unlike traditional, before-tax contributions, Roth contributions come from income that has already been taxed. That means qualified withdrawals from Roth accounts, including earnings, will be free from federal and most state income taxes.1

To help you understand this option, here’s a comparison of traditional and Roth accounts.

Traditional and Roth 401(k)/403(b) contributions

  Traditional Roth
Contribution limits $17,500, or $23,000 for investors 50 and over. Limits apply to all participant contributions combined, whether traditional, Roth or both.
Employer matching contributions Treated as traditional contributions.
Participant contributions Before-tax dollars After-tax dollars
Distributions Taxable2 Tax-free1
Required minimum distributions (RMDs) RMDs must begin at age 70–1/2 or at retirement, whichever is later. Same as traditional. However, Roth accounts can be rolled into Roth IRAs, which are not subject to RMDs while the IRA owner is alive.
IRA rollover options Non-Roth balances can be rolled into traditional or Roth IRAs. Can be rolled into Roth IRAs.

Attractive benefits

Roth contributions are made with money that’s already been taxed, so you won’t have to pay taxes on qualified withdrawals, including earnings.

If you currently earn too much to qualify to make Roth IRA contributions, you can consider making Roth contributions to your 401(k) or 403(b) plan if it accepts them because these Roth accounts do not have income restrictions.

Talk to your financial professional

To find out more about Roth contributions, please contact your financial professional.

1 Withdrawals from Roth accounts are tax-free if participants are at least 59-1/2 years old, or have died or are disabled; additionally, the Roth account must have been established at least five years before. Nonqualified withdrawals may be subject to a 10% early withdrawal penalty, and the earnings portion of nonqualified withdrawals is subject to income taxes.

2 Distributions are taxable as income to the participant. Withdrawals made before age 59-1/2 may also be subject to a 10% early withdrawal penalty.


Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.