A Roth after-tax option for the 403(b) and 457(b) plans will now be available at all institutions. It offers another way you can save for your financial future by enabling you to contribute money to your plan after you have already paid your taxes and withdraw the contributions and earnings tax free in retirement. You can invest after taxes through the Roth, continue contributing before taxes, or choose a combined approach.
Is the Roth contribution option right for you?
Contributing to the Roth option today may provide significant tax savings— especially if you expect your tax rate to be higher when you retire. While it’s difficult to predict what your future tax situation may be, you’ll want to estimate as best as you can, taking into consideration the most appropriate choice for your current tax circumstances. Please consult your tax advisor.
|If you expect your tax rate during retirement will be||Contribution option|
|Higher than your current rate||Roth after-tax contribution option. Since you already paid taxes on your contributions, withdrawals are tax free.|
|Lower than your current rate||Pretax contribution option. While the withdrawals are taxable, you expect to benefit by being in a lower tax bracket during retirement.|
|Same as your current rate||Either or both.|
Roth contributions are included in your maximum contribution limits, plus any catch-up limits, if applicable. Roth contributions may reduce your loan-taking capacity. If you have a Roth balance, it will be included in the calculation of your loan amount availability, but the loan amount must come from your pretax balances only. Furthermore, loans solely from Roth balances are not available.
Your ability to withdraw tax free assumes you meet the government requirements for distribution. Generally, you can make tax-free distributions from the Roth after a taxable five-year period of participation in the Roth, and the withdrawal is either: made on or after the date you attain age 591/2; made after your death; or attributable to your being disabled.
Brokerage option now available for all plans; from all providers
You can access thousands of mutual funds, individual, stocks and ETFs. Individual investment options vary by plan and by provider. Additional brokerage account fees apply.
For investors with specialized investing needs, more choice can mean more opportunity to direct retirement investments across markets and asset classes outside of the plan’s core lineup. With your brokerage account, you can independently research and select from thousands of mutual funds. Additional brokerage account fees apply.
It’s important to understand that USG will not monitor the performance of the funds offered through the brokerage account, and investment advice is not available for brokerage assets. Plan participants will bear the risk of investing through the brokerage account. USG recommends that you exercise caution and consider seeking professional guidance when investing through a Brokerage account.
Retirement Program Investment Advice
Beginning January 1, 2019, USG will offer all retirement program participants an opportunity to schedule a one-on-one advice session with CAPTRUST as a resource to help you during the transition to:
- Better understand the enhancements and how they may affect your goals for saving for retirement.
- Review your current retirement investment strategy.
- Choose your provider and an investment mix based on factors specific to your needs.
- Determine if you are on track to achieve your retirement goals.
To schedule an advice session, call CAPTRUST at 800-967-9948, Monday to Thursday, 7:30 a.m. to 4:30 p.m., and Friday, 7:30 a.m. to 3 p.m. (ET). Visit captrustadvice.com to schedule an appointment, attend webinars and access educational information. Evening appointments are available.
There is no additional fee for engaging CAPTRUST. This is an enhanced service offered to plan participants.
Of course, you can continue to work with your selected providers—Fidelity, TIAA and VALIC—to receive advice and guidance on the plan’s investments and your goals for the future, and to determine if you are on track to meet your goals. Call or go online to schedule a consultation. Evening appointments are available.
You may also directly contact the VALIC advisor for your institution using the list in the VALIC Guide to New Investment.
The new retirement plan online portal was designed to give you greater access to your University System of Georgia retirement plans. TIAA, as one of your retirement providers, will also serve as the primary point of contact and host for the online portal.
You will use the online portal to:
- Enroll in the retirement plans.
- View all USG retirement plan balances regardless of investment provider.
- Start, change or stop voluntary contributions.
- Select investment providers.
- Select new investment options, including the expanded Brokerage options, via links to each provider’s website.
- Manage your account and access investment tools and calculators.
You will receive a step-by-step guide about how to use Retirement@Work once the system is available for use in July 2019.