The current contribution limit for a designated Roth 401(k) account for the 2019 fiscal year is $19,000, up from $18,500 in 2018. Also, account-holders who are age 50 or more may make catch-up contributions of up to $6,000, for a potential total annual contribution of $25,000. Catch-up payments are additional contributions allowed to help those nearing retirement age bulk up the account in the years before they will need the funds for regular income.
Roth 401(k) vs. Traditional 401(k)
Although the contribution limits are the same for traditional 401(k) plans and their Roth counterparts, technically a designated Roth 401(k) account is a separate account within your traditional 401(k) that allows for the contribution of after-tax dollars. The elected amount is deducted from your paycheck after income, Social Security and other applicable taxes are assessed; the contribution doesn't garner you a tax break in the year you make it.
On the other hand, no income tax is due on these funds – or their earnings – upon their withdrawal after your retirement. (A traditional 401(k) works in the opposite way: Savers make their contributions on a pretax basis and pay income tax on the amounts withdrawn once they retire.) ‘
Many savers use a combination of the Roth 401(k) and the traditional 401(k) to plan for retirement. Splitting your retirement contributions between both kinds of 401(k)s, if you have the option, can help you ease your tax burden in retirement.
The current contribution limit for a Roth 401(k) account for the 2019 fiscal year is $19,000.
If You Have Multiple Roth Accounts
Roth IRA accounts, which have a separate annual limit of $6,000 for 2019 (up from $5,500 in 2018), with an additional $1,000 in catch-up contribution limit if you are age 50 or over for a total of $7,000. The question for those who also want to have a Roth IRA: Do you meet the income limits for being permitted to have one? The income phase-out for Roth IRA contributions starts at $122,000 (up from $120,000 in 2018) for single filers as of 2019 and eligibility ends as $137,000 (up from $135,000).
For married filing jointly filers (and qualifying widow(er)s) in 2019, that income threshold starts at $193,000 (up from $189,000) and ends at $203,000 (up from $199,000). Thus, if you have both a Roth 401(k) plan and a Roth IRA, your total annual contribution for all accounts has a combined limit of $25,000 ($19,000 Roth 401(k) contribution + $6,000 Roth IRA contribution) – or $32,000 if you are 50 or older ($19,000 Roth 401(k) contribution + $6,000 catch-up contribution + $6,000 Roth IRA contribution + $1,000 catch-up contribution).
Roth 401(k) contributions must be made by the end of the calendar year (the 2018 contribution deadline is Dec. 31, 2018). Roth IRA contributions have a bit more time; you must make them by tax day, April 15, 2019, to count for 2018.
Five years must pass from your first contribution before you can withdraw from y our Roth 401(k) tax-free, and you must be 59.5 years old to withdraw from it. At 70.5 years old, you are required to take minimum distributions from your Roth 401(k).