The Roth 403B Fact Sheet

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    Benefits

    • Roth 403b plans permit you to make after-tax contributions to your retirement plan, which offers the biggest advantage to people who expect to fall in a higher income tax bracket at retirement than they do in the current year. For example, if you just graduated college and only fall in the 15 percent tax bracket, you would probably benefit because you will likely face a higher tax rate at retirement.

    Size

    • Roth 403b plans can accept the same amount of contributions as a traditional 403b plan. The government sets this amount each year, based on the prior year's limit and inflation. For 2010, the government permits employee contributions of up to $16,500.

    Drawbacks

    • Like traditional 403b plans, money in a Roth 403b plan can only be invested in mutual funds or annuities. If you prefer a more hands-on approach to your retirement accounts, you may prefer a Roth IRA instead.

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