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Roth 401(k), Roth IRA, and Pre-tax 401(k) Retirement Accounts
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Designated Roth 401(k) |
Roth IRA |
Pre-Tax 401(k) |
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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. |
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Income Limits |
No income limitation to participate. |
Income limits:
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No income limitation to participate. |
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Maximum Elective Contribution |
Aggregate* employee elective contributions limited to $19,500 in 2020 and $19,000 in 2019 (plus an additional $6,500 in 2020 and $6,000 in 2019 for employees age 50 or over). | Contribution limited to $6,000 plus an additional $1,000 for employees age 50 or over in 2019 and 2020. | Same aggregate* limit as Designated Roth 401(k) Account |
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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:
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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. |
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Required Distributions |
Distributions must begin no later than age 72 (age 70 ½ if reached age 70 ½ before January 1, 2020), unless still working and not a 5% owner. | No requirement to start taking distributions while owner is alive. | Same as Designated Roth |
| * This limitation is by individual, rather than by plan. You can split your annual elective deferrals between designated Roth contributions and traditional pre-tax contributions, but your combined contributions can’t exceed the deferral limit - $19,500 in 2020 and $19,000 in 2019 ($26,000 in 2020 and $25,000 in 2019 if you're eligible for catch-up contributions). | |||
