Designated Roth accounts are becoming more popular in the 403(b)/457(b) marketplace. As a 403(b)/457(b) retirement trainer, it has become apparent in the time I spend on Roth questions, that agents/advisors are hungry for more education on the topic.
As a result, I was eagerly anticipating the Jan. 26 Mega Roth Conversion Strategy break-out session at the 2020 NSTA Summit. I assumed it would be focused on IRA Roth conversion, but to my surprise, the discussion turned to Roth 403(b) accounts. My interest peaked. Back straightened. Eyes up front. Hand ready to take notes.
The session did not disappoint. Speaker Kathy Hamlin Consultant, Ascensus, LLC, began by explaining the differences between pre-tax (traditional) and Roth accounts and how different demographic of employees use them as tax strategies. I thoroughly enjoyed this session and learned a lot, because I also begin the 403(b) contributions section of my own presentations explaining the differences between pre-tax and Roth. I hope that by attending this session I would receive nuances and tidbits I could take back and implement into my training classes.
And I received more than I expected. During the 50-minute session, I found these topics to be the most insightful and helpful to my development:
- Rollovers. When two companies merge, and the participant has a 403(b) account at both employers, the five-year “clock” start from the earliest plan.
- Sales Idea. Advisors/Agents with clients 55 years of age in a Roth 403(b) account should establish a Roth IRA for “clock” purposes.
- Mega Roth Conversions. A prime candidate for such conversions is anyone who wishes to avoid taking RMDs, by rolling to Roth IRA.
I found the session to be professionally fulfilling and extremely informative. As a result, I will surely be incorporating more discussions on designated Roth accounts in my upcoming training classes. Thanks, NTSA!
Damien M. Adams is Retirement Lead Trainer, Retirement Services, for National Life Group.
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