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Yes. You can choose to contribute pre-tax contributions, Roth contributions, or a combination of both.
Making Roth contributions to the Plan does not impact your eligibility to make Roth IRA contributions. Based on your income, however, you may not be able to contribute to a Roth IRA.
No. The law does not allow Roth IRAs to be rolled into the Plan.
No. You would only need to select an allocation percentage for your Roth contributions. You may do this by logging into your account at Prudential online or by completing the Deferred Compensation Change Request Form. The contributions will be made to your existing NJSEDCP account.
If you are not currently participating in the NJSEDCP and would like to participate, please complete the NJSEDCP Enrollment Form.
Roth contributions will be tracked separately both on your paycheck and in your account at Prudential Retirement. Roth contributions will be listed as a separate ‘source’ of money on the participant website and on your quarterly statement.
The IRS limit applies to the combined contribution amount. The limit remains unchanged at $18,000 for 2017. You may also be eligible to make catch-up contributions. If you are age 50 or over as of December 31, 2017, you can contribute an extra $6,000. Your Plan also offers a Special 457 Catch-up for participants who have not always maximized their annual contributions to the NJSEDCP.
Roth contributions are voluntary contributions that are made on an after-tax basis. The amount you contribute is included in your W-2 in the year you make your contribution. Roth contributions and any earnings on those contributions are tax-free upon distribution because you already paid income tax on your Roth contributions. A withdrawal of your Roth contributions is always 100% federal income tax free.
Traditional contributions are made on a before–tax basis, reducing your taxes at the time you make the contribution. Traditional pre-tax contributions, and any earnings on those contributions, are subject to ordinary taxes upon distribution.
Deciding which contribution type is better for you is a personal decision as you can choose to contribute pre-tax contributions, Roth contributions, or a combination of both.
The 5-taxable-year period of participation begins on the first day of the calendar year in which you make your first Roth contribution to the Plan and ends when five consecutive calendar years have passed.
For additional information about the Roth Contributions visit the Prudential website.
You may call your Prudential representative, Robert Rooyakkers at 732-587-8331.
You may call a Benefits Specialist at 848-932-3990.