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Office of Human Resources

Roth 403(b) After-tax Contributions

The Roth 403(b) after-tax feature has been added to the Retirement Program effective May 1, 2009 for your Voluntary Contributions. With the addition of the Roth 403(b) feature, you now have the opportunity to choose whether you wish to make Voluntary Contributions on a pre-tax basis, on an after-tax basis using the Roth feature, or as a combination of both.

With the Roth 403(b) after-tax option, your Voluntary Contribution is taken out of your paycheck after your income is taxed, which does not lower your current taxes. Withdrawals of Roth after-tax contributions are generally tax-free since you have already paid the taxes on the contributions. In addition, when you withdraw the Roth after-tax portion of your Voluntary Contributions, you will not pay taxes on any earnings on your Roth after-tax contributions, as long as you are at least age 59 1/2 (or die or become disabled) and your withdrawal is made at least five years after making your first Roth after-tax contribution.

For the pre-tax 403(b) option, your tax-deferred Voluntary Contributions are deducted from your gross wages before amounts are taken out for income taxes. This reduces your taxable income by the amount of your Voluntary Contributions, which means you lower your current taxable income. You do not pay taxes on your contributions and any earnings until you take the money out, typically in retirement.

For additional information on the Roth 403(b) feature and the differences between pre-tax and Roth after-tax Voluntary Contributions, please review the “Frequently Asked Questions” .