Frequently Asked Questions

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403(b) ROTH

  • What is a Roth 403(b)?

This is an after-tax retirement benefit that allows you to pay taxes now on the money you set aside instead of paying taxes at the time of withdrawal.

  • Will I benefit from the Roth 403(b)?

You will benefit from the Roth 403(b) if: (1)You have a longer time until retirement. This gives you longer to accumulate tax-free earnings. (2) You are a highly compensated employee who is not eligible for a Roth IRA. (3)You want to leave tax-free money to your beneficiaries.

  • Who might not benefit from the Roth 403(b)?

You might not benefit if you are: (1) Someone who expects Social Security to be main source of retirement income and tax rate are likely drop in retirement. (2) A worker earning between $20,000 and $50,000 who qualifies for certain valuable tax credits, such as the earned income tax credit.

  • Is Roth 403(b) participation limited by household income?

No. Unlike Roth IRA’s, there are no maximum income limits for Roth 403(b) contributions.

  • How do I elect the Roth 403(b)?

See How to Enroll.

  • How are the annual IRS contributions limits affected by Roth after-tax contributions?

The combination of traditional pre-tax and Roth after tax deferrals in both the Emory University and The Emory Clinic 403(b) plans cannot exceed IRS limits. The IRS sets limits annually. For current year limitations, see Roth Employee Contributions.

  • How do Roth after-tax contributions affect my paycheck?

Unlike pre-tax contributions, Roth after-tax contributions do not reduce your taxable income. Therefore if you elect Roth after-tax contributions, your net pay is reduced due to additional tax withholdings.

  • Do I have the same investment options available for Roth after-tax contributions as I do with the traditional pre-tax contributions?

Yes, the same investment options are available for Roth after-tax contributions.

  • What is the Qualified Distribution criteria for a Roth 403(b)?

The account must have been established for at least 5 years, and the withdrawal must meet one of the following conditions: (1) Be taken after age 59½. (2) Be as a result of total and permanent disability or death.

  • What if I want to take a distribution of my Roth after-tax contributions and associated earnings before I have met the Qualified Distribution criteria?

If a distribution of your Roth after-tax account is made before it has met the Qualified Distribution criteria, the amount of the distribution that represents income on the employee’s account is includable in gross income. The amount that represents your designated Roth contribution is not taxable. Penalties for early withdrawal still apply.

  • Does electing Roth 403(b) after-tax contributions affect when I can take money from the plan?

No, the rules governing when you can take a payment from the plan have not changed. Please see the Retirement Plan 403(b) Summary Plan Description for more detailed information.

  • What distribution options are available to me for my Roth 403(b) balance?

You have the same distribution options for your Roth 403(b) balance as you do for your 403(b) pre-tax balance. Please note that Roth 403(b) accounts may only be rolled over into another Roth 403(b) account or a Roth IRA..