- December 2009 > Retirement Corner
Retirement Corner
Roth IRAs and UTSaver Roth 403(b) TSA: There is a Difference!
There has been a lot of talk about Roth Individual Retirement Accounts (IRAs) in 2010. In January 2010, there will no longer be an income limit to convert traditional, pre-tax IRAs into post tax Roth IRAs. This option would allow participants to pay taxes on saved money now in order to receive funds and earnings tax-free at the time of an eligible distribution later.
It is important to note that the University of Texas System does not offer a Roth IRA. Instead, in addition to a UTSaver 457(b) Deferred Compensation Program and the Traditional Pre-tax UTSaver 4039b) Tax Sheltered Annuity (TSA), the UTRetirement Programs offer a UTSaver Roth 403(b) TSA account to all participants.
The most significant difference between a Roth IRA and the UTSaver Roth 403(b) is the annual contribution limit. In 2009, participants can contribution up to $5,000.00 to an IRA, plus an additional $1,000.00 if over 50. However, participants can contribute as much as $16,500 a year into the UTSaver Roth 403(b) account plus an additional $5,500 if over age fifty. However, unlike an IRA, the UTSaver 403(b) accounts cannot be converted from a traditional (pre-tax) to a Roth (post-tax) account.
To read more about the differences between the UTSaver Roth 403(b) TSA and a Roth IRA, please visit our website at www.utretirement.utsystem.edu.
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