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As of January 1, 2006, a Roth 403(b) may be offered as an optional employer-sponsored benefit. It is an after-tax retirement contribution savings plan and provides qualifying tax-free distributions.
If you are eligible to participate in a traditional 403(b), you would be eligible to participate in a Roth 403(b), if your employer chooses to make such a plan available. Catch-up provisions for those age 50 and older are also available.
The contribution limits for elective contributions are the same as for traditional 403(b) plans. The combined total elective deferral limit for both plans in 2009 is $16,500.00.
Tax-free distributions are allowed after five years and after the participant reaches the age of 59½. Plans must be held for at least five years, even if the participant has reached age 59½, in order to be tax-free. Tax-free distributions are also available upon the participant?s death or qualifying disability.
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