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You have two options for the 401(k403(b)(9) contributions that are deducted directly from your paycheck, traditional and rothTraditional and Roth. You can choose to make employee contributions through just Traditional, just Roth, or both Traditional and Roth. You determine your employee contribution amounts for each type within these Annual Contribution Limits.
Reliant auto-enrolls you at $50/month as a Traditional contribution. To adjust your types of contributions (change to Roth or to add Roth to your employee contribution) or to edit the amount of your contribution see Changes to Contributions.
The Reliant employer match is always Traditional (pre-taxed). If you want to convert your employer match to Roth see Roth Conversion Form or Roth Transfer Form.
Traditional “Pre-Tax” Contributions
The money you invest in the Traditional 401(k403(b)(9)plan (from your monthly paychecks) is not taxed by the government at this time.
You will pay taxes on this invested money (plus any interest you make on that money) when you withdraw the funds at retirement.
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Traditional 403(b)(9) Contribution Example
Yearly wages = $20,000
Yearly
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403(b)(9) Contribution = $2,000
Your federal tax bracket would be based on taxable earnings of $18,000 for the year. At the end of the year
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when you file your taxes, your federal taxable income would be $18,000.
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Traditional 401(k403(b)(9) contributions save you money on your taxes now. The The amount you contribute from your paychecks as Tradiditional 401(ktraditional 403(b)(9)contributions reduce your federal tax bracket and liability right now. Traditional 401(kTraditional 403(b)(9) contributions may be a good fit for people who 1) :
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Roth “After-Tax” Contributions
This option does not reduce your taxable earnings for the year. With this type of contribution you pay taxes on the money now (even though it gets directly deposited into your 401(k403(b)(9) account). However, when you withdraw these funds at retirement, your invested money (plus the interest earned) is not taxed.
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Reliant encourages all international employees to seek tax counsel regarding IRS ruling 70-491 when determining if the Roth option is something they should utilize for their retirement savings. There may be tax implications of selecting Roth for your retirement funds while filing under the Foreign Earned Income Exclusion to consider and discuss with your tax counsel. |
Roth 403(b)(9
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) Contribution Example
Year wages = $20,000
Yearly
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403(b)(9) Contribution = $2,000
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Your federal tax bracket would be based on taxable earnings of $20,000 for the year.
However, if that grows with interest to $100,000 over 35 years you will not owe taxes when you withdraw it.
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Roth 401(kRoth 403(b)(9) contributions save you money on your taxes when you retire and start withdrawing the retirement funds. The The amount you contribute from your paychecks as Roth 401(kas Roth 403(b)(9) contributions do NOT reduce your federal tax bracket and liabilitynowliability now. However, when you withdraw the funds in retirement you do not have to pay Federal federal taxes on the Roth amounts Roth amounts you contributed to the 401(k403(b)(9) plus you don't have to pay Federal federal taxes on any interest you withdraw/earned from those Roth contributions. Roth 401(kRoth 403(b)(9) contributions may be a good fit for people :
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Roth tax savings do not apply to the employer match and interest earned on the match. |
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If you want to convert your employer match to Roth see Roth Conversion Form or Roth Transfer Form |
