What is the difference between an after-tax (Roth) 403(b) and a Roth IRA?
Roth 403(b) contributions are after-tax, which means you pay taxes on your contributions now, but all qualified* withdrawals, including earnings, are tax-free. The Roth IRA is an additional after-tax savings option. Participants may want to contribute to a Roth IRA if they are maximizing their 403(b) contributions, or if they are concerned about the ability to access their contributions before retirement. However, not everyone is eligible for the Roth IRA. To contribute, your income must not exceed $105,000–$120,000 (single) or $166,000–$176,000 (married, filing jointly). Also worth noting is the difference between contribution limits for the Roth 403(b) and Roth IRA. Contribution limits are substantially lower in the Roth IRA. In 2009, for participants under age 50, a Roth IRA allows contributions only up to $5,000 annually, compared to $16,500 for the Roth 403(b). *For qualified withdrawals from a Roth 403(b), the participant must be age 591/2 or older and have had the Roth 403(b) ac
