The Retirement Savings Plan offers two ways to save — pretax and Roth after-tax. Both can benefit your tax situation before and after retirement.
The Retirement Savings Plan of the Presbyterian Church (U.S.A.) offers two approaches to saving for retirement — pretax or Roth after-tax contributions.
Pretax contributions allow you to defer paying taxes — that means you don’t pay taxes on pretax money you contribute to the Retirement Savings Plan until after retirement.
Roth after-tax contributions to the Retirement Savings Plan offer similar advantages to Roth IRAs (Individual Retirement Accounts). You pay taxes on your contributions now (by contributing after-tax dollars) and withdraw that money tax-free later, if you meet IRS requirements.
So, which is the best way for you to save? The short answer is that it depends.
It can be hard to predict the future, but here are some key questions to ask yourself:
According to Fidelity Investments, the Retirement Savings Plan administrator, it may be advantageous to save on both a pretax and Roth after-tax basis — called tax diversification. You can review the ratio of pretax to Roth after-tax contributions periodically as your tax situation changes or your retirement time horizon moves.
Find out more about the Retirement Savings Plan. If you have questions, call the Board of Pensions at 800-773-7752 (800-PRESPLAN), or call Fidelity Investments at 800-343-0860 (mention plan #57887).
If your employer offers the Retirement Savings Plan and you’re not contributing, ask how to get started.
If your employer doesn’t offer the Retirement Savings Plan, ask them to contact the Board of Pensions for more information. All employees who work for a PC(USA)-affiliated employer are eligible to participate in the Retirement Savings Plan if their employer offers the plan to them.
Investing involves risk, including risk of loss. The value of your investment will fluctuate over time and you may gain or lose money.