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Roth Comparison Chart

 

Comparison of Roth 401(k), Roth IRA, and Traditional 401(k) Retirement Accounts 

  

 

 Designated Roth 401(k) Account

 Roth IRA

 Traditional, Pre-Tax 401(k) Account

 Contributions

Designated Roth employee elective contributions are made with after-tax dollars. Roth IRA contributions are made with after-tax dollars. Traditional, pre-tax employee elective contributions are made with before-tax dollars.

 Income Limits

No income limitation to participate.

Income limits: 

  • 2013- modified AGI married $188,000/single $127,000
  • 2014 - modified AGI married $191,000/single $129,000
No income limitation to participate.
 

 Maximum Elective Contribution

Aggregate* employee elective contributions limited to $17,500 in 2013 and 2014 plus an additional $5,500 for employees age 50 or over. 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) Account
 

 Taxation of Withdrawals

Withdrawals of contributions and earnings are not taxed provided it’s a qualified distribution – the account is held for at least 5 years and made:

  • On account of disability,
  • On or after death, or
  • On or after attainment of age 59½.
Same as Designated Roth 401(k) Account and can have a qualified distribution for a first time home purchase. Withdrawals of contributions and earnings are subject to Federal and most State income taxes.
 

 Required Distributions

Distributions must begin no later than age 70½, unless still working and not a 5% owner. No requirement to start taking distributions while owner is alive. Same as Designated Roth 401(k) Account.

* 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.
Page Last Reviewed or Updated: 31-Oct-2013