Page 19 - FSSI EE Guide 07-20 - CA

Plan Differences TRADITIONAL 401(K) ROTH 401(K)
Funding Funded with pre-tax dollars Funded with after-tax dollars

Employer Matching Contributions Made on a pre-tax basis. Taxed as ordinary income when withdrawn.
Employee Contribution Limits $19,500 ($26,000 if age 50 or older)
If you make a combination of Traditional and Roth 401(k) deferrals,
your limit cannot exceed contribution limit
Investment Earnings Tax-deferred Tax-free
Taxes Pay taxes on withdrawals Pay taxes now
Reduces current income now Tax-free withdrawals at retirement
Access to Money You can access your money when you leave your job, become disabled,
die, or if the plan provides, you reach age 59-1/2
Tax-free Distribution N/A 2 conditions must be met:
(1) Distribution must be a “qualified
distribution” - attainment of age
59-1/2, death or disability
(2) Special 5-year rule: contributions
must remain in the plan for 5
years of the first Roth 401(k)
contribution to receive the tax-
free advantage
Minimum Required Distribution Age 70-1/2 Age 70-1/2
A Roth 401(k) can be rolled over to a
Roth IRA and minimum distribution
rules don’t apply to distributions
made before death
Rollovers Can be rolled over into a traditional Can be rolled over into a Roth IRA
IRA. May also be rolled into a Roth
IRA, but taxes will be due

It’s never too early or too late to start investing in your future. Even if you’re
in your 40s or 50s, there’s still time to build a significant nest egg for
retirement.

Choosing a Beneficiary
Choosing a beneficiary and keeping your Managing Your 401(k)
beneficiary up-to-date is an essential part
of having a 401(k). Please remember to Go to www.netbenefits.com (Plan # 32123) or
call (800) 835-5097.
review your beneficiary designation as new
situations arise, such as the birth or
adoption of a child, marriage, or divorce.
You may login to www.netbenefits.com to
change your beneficiary as needed.