Before you determine which road or combination of roads may be right for you, you’ll need to consider a few important factors, including when you want to pay taxes. Let’s take a closer look.
What to know before you hit the road
Pretax contributions | Roth contributions | |
---|---|---|
Is my contribution taxable in the year I make it? | × | |
Is my contribution taxed when distributed? | × | |
Are potential earnings on my contributions taxed when distributed? | × | No, provided that it is qualified distribution.3 |
Can I contribute to both Roth and pretax plans? | × | × |
If I experience a financial hardship, can I make a withdrawal? | × | × |
Yes, if your plan allows hardship withdrawals. | ||
Do I have to take a minimum distribution at age 73? | × | Not required |
Once you reach age 73, you are generally required to begin taking minimum distributions.4 | ||
If I change jobs, can I roll over my account? | × | × |
Yes, to an eligible employer plan (if the plan allows it) or to an IRA.5 |