FAQ – Individual Retirement Accounts

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I am a teacher, age 67. I have an IRA-403(b), but have not contributed to it for a year. Am I eligible to open a Roth 403(b) account?

If your district offers a Roth feature with its 403(b) retirement plan, you may open a Roth 403(b). You may direct your contributions to a traditional 403(b), a Roth 403(b), or both. However, your maximum allowable annual contribution – including catch-up contributions (if applicable) – is not affected by the number of 403(b) accounts you have. You cannot contribute more than the annual maximum regardless of the number of accounts.

For 201​5, the limit on elective deferrals is $1​8,​000 plus a catch-up contribution of $​6,​000 for those age 50+.*

With a Roth 403(b) account, your contributions are made on an after-tax basis; there is no current tax break. However, contributions and earnings may be withdrawn tax-free if the account has been held at least five years and the account holder is age 59½ or older. Nonqualified withdrawals are subject to ordinary income taxes and a 10% tax penalty.

For more about how to decide whether a Roth 403(b) is right for you, see What Is a Roth 403(b) Plan?

* Eligible employees with 15 or more years of full-time service may be able to contribute up to $3,000 more for five years, or a maximum of $15,000.

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