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. 401(k) Plan

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

    An investing tool used by individuals to earn and earmark funds ...
  3. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
  4. Roth IRA

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

    An employer-sponsored investment savings account that is funded ...
  6. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
Related Articles
  1. Tax Treatment Of Roth IRA Distributions
    Taxes

    Tax Treatment Of Roth IRA Distributions

  2. Tips On How To Use IRAs To Boost Retirement ...
    Retirement

    Tips On How To Use IRAs To Boost Retirement ...

  3. IRA Contributions: Deductions and Tax ...
    Taxes

    IRA Contributions: Deductions and Tax ...

  4. An Introduction To Roth IRAs
    Taxes

    An Introduction To Roth IRAs

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center