New Roth 457 Option Planned
We are currently in the development phase to offer a Roth 457 option.
As development progresses, we’ll provide additional information, but we want to let you know a few important details now in response to your most common questions:
- Roth IRA rollovers are not permitted to a Roth 457 option based on current IRS regulations
- Traditional pre-tax assets will not be able to be converted to Roth assets
- The Roth option will only be available to employees of employers who elect to offer the Roth option
Below is a comparison of the traditional pre-tax option and the Roth post-tax option:
|Feature||Traditional 457(b)||Roth 457(b)|
|Contributions||Pre-tax dollars||After-tax dollars|
|2019 Annual Limits||$19,000 ($25,000 if age 50+, $38,000 for Special Catch-up)
Combined contributions to Traditional and Roth plans must remain below the annual limits
|Investment Growth||Accumulates tax-deferred||Accumulates tax-free|
|Federal Tax on Distributions||Taxable income||Tax free if certain criteria are met*|
* Tax free starting at age 59 ½ and if there were no withdrawals within five years of the first contribution.