Roth 457 Accounts: A Potential Tax-free Retirement Income

You’ve probably heard of a Roth IRA – an investment vehicle that lets you make contributions that are not tax deductible but take tax-free distributions in retirement, after certain conditions are met. Did you know there’s also a Roth option for 457(b) and 401(k) plans?

When you choose to make Roth contributions, you’ll pay taxes upfront when your money goes into the plan. Then you’ll enjoy tax-free withdrawals – as long as you’re at least 59½, and do not take withdrawals from your Roth account for at least five years after your first Roth contribution is made to the plan.

You can choose to make all of your salary deferral as a Roth contribution, or all or part of your salary deferral as pre-tax contributions to the Maryland plan or plans in which you participate.

Is Roth right for you?

Only you can answer that question. But you may want to consider making Roth contributions if you:

  • Think that taxes will be raised before you retire and want to take advantage of potential tax-free withdrawals
  • Expect to be in a higher tax bracket when you retire
  • Are younger, with many years until your retirement

Get the help you need

Talk with one of our Team MSRP Retirement Specialists about whether Roth contributions may be right for your retirement portfolio. Team MSRP does not offer investment, tax or legal advice. You should consult your own counsel before making decisions about MSRP participation.

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