More information on the UC Retirement Savings Program and the new Roth option for contributing to 403(b) and 457(b) accounts is available on the UC Retirement website. The town of Davis helps our students thrive. College students fill up the tables at nearby restaurants and coffee shops with their laptops, homework and friends. So, if you’re not eligible to contribute to a Roth IRA due to income limits, but would like potentially tax-free income in retirement, consider Roth contributions.” You can walk or bike from the main campus to the main street in a few blocks. Making more than $153,000 individually or $228,000 as a couple: “Not eligible to contribute to a Roth IRA? While income limits may prevent you from contributing to a Roth IRA, the UC 403(b) and 457(b) Plans don’t carry these income limits.The pros and cons are subtle and complex, however, so consult an attorney or estate planning expert before attempting to use your RSP as part of your estate plan.”
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Creating a tax-free inheritance: “Interested in leaving tax-free money to your beneficiaries? Roth dollars are potentially free of federal income taxes to beneficiaries of inherited retirement savings.And, if you have a combination of pretax and Roth contributions you have flexibility to choose which distribution type to take based on your tax situation.” Roth dollars can help you cover larger expenses without increasing your taxable income for the year. Large, varying expenses in retirement: “Want tax flexibility in retirement? Once you retire, your expenses may vary more year-to-year than they do today.Growing income: “Think your income tax rate will be higher in retirement? If you think your tax rate will be higher in retirement-either due to higher income or higher overall tax rates-when you take your distributions, consider making Roth contributions.”.Why? Because you have a longer time frame for potential growth and to benefit from the power of compounding.” Young employees: “In general, the younger you are when you start making Roth contributions, the more you may benefit.
UC had this to say about scenarios where Roth contributions to a 403(b) or 457(b) might make more sense: These programs are voluntary and separate from the UC’s primary retirement benefits, which include the UC Retirement Plan, Pension Choice or Savings Choice, depending on when an employee was hired and the option they choose. It is different from the type of Roth IRA plan employees may already have at another financial institution, because those plans are subject to lower annual contribution limits. Some allow you to login with your UC Davis credentials for others, you may need to connect to the Library VPN if you are. The Roth option is part of the University of California Retirement Savings Program’s 403(b) and 457(b) plans, which are similar to 401(k) employer-sponsored retirement plans, but only available for employees of nonprofit institutions. In contrast, the existing 403(b) and 457(b) options are funded with pre-tax money and taxed at the time of withdrawal. Watch a video: Ways to Save with Roth in the UC Retirement Savings ProgramĬall Fidelity, which administers the plans on behalf of UC, at 86. Register for one of two webinars to explain the new Roth option:
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