Designated Roth Account

AAA

DEFINITION of 'Designated Roth Account'

An individual retirement plan in which employees can have all or a portion of contributions to a 401(k) or 403(b) placed into a separate Roth retirement account. Contributions made to a designated Roth account are considered to be to a separate account within the 401(k) or 403(b) plan, and contributions, gains and losses are accounted for separately from regular 401(k) or 403(b) contributions.

INVESTOPEDIA EXPLAINS 'Designated Roth Account'

Employers can make matching contributions to the designated Roth account, just as they can to 401(k) or 403(b) accounts. Investors can make contributions to both a pre-tax, traditional retirement account and a designated Roth account during the same tax year, but the total contributions are subject to an annual contribution limit.

RELATED TERMS
  1. Roth IRA

    An individual retirement plan that bears many similarities to ...
  2. Roth 401(k)

    An employer-sponsored investment savings account that is funded ...
  3. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
  4. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  5. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  6. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
RELATED FAQS
  1. What option strategies can I use to earn additional income when investing in the ...

    A risk-averse investor should build his retirement portfolio by putting together a well-diversified portfolio and then regularly ... Read Full Answer >>
  2. What is fiduciary liability insurance, and what are its benefits?

    Under the Employee Retirement Income Security Act (ERISA), any individual who manages a employee benefit or pension plan ... Read Full Answer >>
  3. Should I purchase a master limited partnership (MLP) in my retirement account?

    Most investors should not purchase units in a master limited partnership, or MLP, in their retirement accounts. MLPs offer ... Read Full Answer >>
  4. How should I invest the money I keep on my IRA?

    For individuals who are just starting to save, certificates of deposit can be a good place to start, but the interest rates ... Read Full Answer >>
  5. Why choosing the right investment advisor is crucial for your portfolio's health

    Just as finding a good mechanic will help keep your car running smoothly, finding a good broker or financial advisor can ... Read Full Answer >>
  6. What documents I need to transfer an IRA/SEP/SIMPLE to a Traditional IRA?

    Most firms require that you complete their account transfer request form, which they use to request the transfer of assets ... Read Full Answer >>
Related Articles
  1. Taxes

    Tax Treatment Of Roth IRA Distributions

    Learn the requirements for withdrawing funds tax and penalty free.
  2. Retirement

    Tips On How To Use IRAs To Boost Retirement Savings

    According to the Trustees of the Social Security Fund, the fund will be depleted by 2037. Are you ready?
  3. Taxes

    IRA Contributions: Deductions and Tax Credits

    We outline the incentives and help you take full advantage of the benefits.
  4. Taxes

    An Introduction To Roth IRAs

    Be sure to consider the tax benefits and the eligibility requirements of the Roth IRA.
  5. Taxes

    Analyzing IRA And ESA Statements

    Learn how to read and verify 5498 and 5498-ESA reporting your retirement-account contributions.
  6. Retirement

    An Introduction To The Roth 401(k)

    The money that you earn today is taxed today, making tax-free retirement withdrawals a reality.
  7. Retirement

    Roth Vs. Traditional IRA: Which Is Right For You?

    To answer this question, you need to consider several of the factors we outline here.
  8. Taxes

    Recharacterizing Your IRA Contribution Or Roth Conversion

    Learn why you might make such a transaction and find out how to calculate how it will affect you.
  9. Retirement

    Can You Retire In Malaysia With $200,000?

    A low cost of living, street food fit for foodies and unspoiled rainforest and beaches are just a few of the reasons Malaysia is worth looking at as a retirement destination.
  10. Professionals

    Retirement Confidence is Up: Should it Be?

    Research shows that confidence in being able to afford retirement is up but probably shouldn't be, as many aren't taking the necessary steps.

You May Also Like

Hot Definitions
  1. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  2. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  3. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  4. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  5. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  6. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
Trading Center