Understanding Your 401(k) Plan: Roth 401(k) Contributions The following questions and answers will help you decide if Roth 401(k) contributions are right for you.

Who is eligible to make these contributions? If you are eligible to contribute to your 401(k) plan and your plan permits them, you can make Roth 401(k) contributions.

Can I have a Roth IRA and make Roth 401(k) contributions to my 401(k) plan?

Yes. If eligible, in 2022, you may contribute up to $6,000 to a Roth IRA (plus $1,000 as a catch‑up contribution if you are at least age 50). You can contribute up to $20,500 (plus $6,500 if eligible to make a catch‑up contribution) to your 401(k) plan.

Can I make both regular 401(k) contributions and Roth 401(k) contributions at the same time?

Yes. Your contributions can be made up entirely of regular (pretax) contributions, entirely of Roth (after‑tax) contributions, or a combination of the two. Your plan’s recordkeeper will maintain separate accounting for these two types of contributions. Note that your regular (pretax) 401(k) contributions and your Roth 401(k) (after‑tax) contributions both count toward the $20,500 limit in 2022 ($27,000 if eligible to make a catch‑up contribution).

Is there an income limitation for making Roth 401(k) contributions?

No. You are not eligible to contribute to a Roth IRA if your gross income exceeds certain limits, but those income restrictions do not apply to Roth 401(k) contributions.

When must I designate a deferral as a Roth 401(k) contribution?

You must designate your contribution as a Roth 401(k) contribution at the time the deferral is made. You can make this election when you enroll in the plan, or at any other time the plan permits, by completing the proper form or by going to your plan’s website. Your designation of contributions as Roth 401(k) deferrals is irrevocable. This means that you may not change your designation of specific contributions as Roth 401(k) contributions after they’ve been made to the plan. You may, of course, change your contribution rate and any split between regular 401(k) contributions and Roth 401(k) contributions as often as the plan permits. See your summary plan description for more information.

Is there a vesting schedule applied to my Roth 401(k) deferrals?

No. You are always 100 percent vested in your Roth 401(k) contributions, just like your regular 401(k) deferrals.

Will my Roth 401(k) contributions be eligible for any company match? Employers may or may not match Roth 401(k) contributions. Check with your plan administrator.

Can I convert my pretax 401(k) contributions to Roth 401(k) contributions?

Yes, you may convert some or all of your pretax amounts at any time, if your plan permits such conversions. Unlike a Roth IRA, conversions within the plan are irrevocable.

Will distribution of my Roth 401(k) contributions be nontaxable?

The distribution of your contributions will be tax free, since you already paid income tax on them when they were made to the plan. In order for the earnings on those contributions to be tax free, they must be distributed only after you reach age 59½, you become disabled, or your death. Also, your Roth 401(k) contributions must have been in the plan for at least five years from when you first made a Roth 401(k) contribution.

When does the five-year period start?

The five-year period begins on the first day of the year in which you make your first Roth 401(k) contribution. Contributions made in a later year do not start a new five-year waiting period.

What happens to my Roth 401(k) contributions when I terminate employment?

Your Roth 401(k) account balance may be rolled over into a Roth IRA of your choice or to another employer’s 401(k) plan if that plan accepts Roth 401(k) deferrals. If you want to distribute your Roth 401(k) contributions, you will have to pay tax on earnings and a 10 percent early withdrawal penalty unless you are age 59½, are disabled, or pass away.

Will I have to take required distributions of my Roth 401(k) contributions beginning at age 72?

Yes. Like your regular 401(k) contributions, you must begin taking minimum distributions from your Roth 401(k) account at age 72.* (Please note: Roth IRAs have no mandatory distribution requirement.)

Can I withdraw the earnings on my Roth 401(k) contributions to use them to buy my first home, without tax or penalty?

No. That provision is available only in Roth IRAs. If you have additional questions, contact your plan administrator or benefits representative.

* If you turned age 70½ before January 1, 2020, then required minimum distributions must begin at age 70½. 

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