T. Rowe Price Group, Inc. · NASDAQ:TROW
T. Rowe Price — Investor Presentation (2024)
22 slides from T. Rowe Price's investor presentation, 2024
Slide 1: Welcome - Roth Topics
T.Rowe Price’ INVEST WITH CONFIDENCE RETIRE WITH CONFIDENCE® Welcome ROTH TOPICS
Slide 2: Educational purposes disclaimer
This material has been prepared by T. Rowe Price Retirement Plan Services, Inc., for general and educational purposes only. This material does not provide recommendations concerning investments, investment strategies, or account types. It is not individualized to the needs of any specific investor a
Slide 3: Agenda
Agenda ▪ Roth IRA versus Roth 401(k) ▪ Qualified distributions ▪ Advantages/disadvantages ▪ Helping you decide ▪ Maximizing Roth ▪ FAQs ▪ Plan features T. R O W E P R I C E 3
Slide 4: Contributions
Contributions ROTH IRA ROTH 401(k) ▪ Established by individuals ▪ Offered by employer ▪ Eligibility subject to income limits ▪ Eligibility in plan makes you eligible for Roth contributions ▪ Must have earned income to contribute ▪ Must be an active employee to contribute ▪ Make contributions directl
Slide 5: How will this affect my paycheck?
How will this affect my paycheck? Traditional Roth 401(k) Assumptions Pretax 401(k) Gross weekly pay $1,000 $1,000 Gross weekly pay: $1,000 Less pretax contribution $ (50) Contribution rate: 5% Taxable amount of pay $ 950 $1,000 Less tax $ (266) $ (280) Tax rate: 28%* Less Roth contribution $ (50) N
Slide 6: Investments and withdrawals
Investments and withdrawals ROTH IRA ROTH 401(k) ▪ You select your financial institution and ▪ Choose from the options available in how to invest your contributions your employer plan ▪ Withdrawals follow ordering rules ▪ Distributions (withdrawals) made pro rata ▪ Possible exceptions to 10% early w
Slide 7: 401(k) contribution types
401(k) contribution types Pretax Contributions Roth Contributions After you contribute Helps lower current Won’t reduce taxable taxable income income today As your account Any earnings grow Any earnings grow accumulates tax-deferred tax-deferred As you withdraw You pay taxes on ▪ You don’t pay taxes
Slide 8: Qualified distributions
Qualified distributions ▪ A Roth distribution, from a 401(k) plan, is tax-free (“qualified distribution”) if you take it at least five years after the year of your first Roth contribution AND you’ve reached age 59½, become disabled, or died ▪ If your distribution is not qualified, your withdrawal ma
Slide 9: The five-year rule
The five-year rule ▪ Once you meet the five-year requirement in one Roth IRA, it applies to all your Roth IRAs ▪ If a participant completes a full direct rollover of an old Roth 401(k) to their new Roth 401(k), the number of years the funds were in the old plan count toward the five-year period for
Slide 10: Advantages
Advantages ▪ Qualified distributions from your Roth account are tax-free ▪ Tax-free withdrawals may: - Limit the portion of Social Security income subject to federal income tax - Reduce income-related surcharges in Medicare premiums - Limit income in high tax brackets ▪ You don’t have to take an RMD
Slide 11: Disadvantages
Disadvantages ▪ No immediate tax break ▪ If you don’t live to retirement, you may not realize the tax benefits of your Roth account. Your beneficiaries will because the benefits occur when funds are withdrawn. With a pretax contribution, your tax benefits occur in the year you contribute. ▪ If you p
Slide 12: Considerations
Considerations ▪ You may prefer Roth if you expect to move into a higher tax bracket later ▪ You may prefer pretax if you expect to be in a lower tax bracket after retiring ▪ Your tax rate may change in retirement if: - Your deductions change - You continue to work or stop working - Lawmakers change
Slide 13: Profiles for Roth versus Pretax
Profiles for Roth versus Pretax Tax Bracket Individual Profile Situation* Likely Benefits From 12% A young person in a low tax bracket who is likely to be Next higher tax bracket is 22%. Roth (Single) in a higher tax bracket later 22% Someone who already has large traditional retirement Approaching
Slide 14: Roth comparison tool
Roth comparison tool T. R O W E P R I C E 14
Slide 15: For people who are unsure which type of contribution...
“For people who are unsure which type of contribution may be more beneficial, the tiebreaker should often go to the Roth.” Roger Young, Senior Financial Planner T. R O W E P R I C E 15
Slide 16: In-plan Roth rollovers
In-plan Roth rollovers Option to convert non-Roth money sources to Roth ▪ Non-Roth sources Eligibility – Pretax – After-tax ▪ Fully vested Considerations ▪ Distributable and/or non-distributable ▪ All or a portion No paperwork T. R O W E P R I C E 16
Slide 17: In-plan Roth rollovers
In-plan Roth rollovers Option to convert non-Roth money sources to Roth ▪ Entire rollover amount taxable* Eligibility ▪ Reported in year of rollover ▪ Federal, state, and local Considerations ▪ No withholding taken during in-plan Roth rollover ▪ Five-year rule on these dollars counted separately ▪ 1
Slide 18: In-plan Roth rollovers
In-plan Roth rollovers Option to convert non-Roth money sources to Roth Eligibility Considerations ▪ rps.troweprice.com No paperwork Before making your decision, consult with your tax professional to determine if an in-plan Roth rollover makes sense for you. T. R O W E P R I C E 18
Slide 19: Mega backdoor Roth
Mega backdoor Roth PRETAX ROTH AFTER-TAX EMPLOYER Limit: $23,000 + $7,500 (catch-up) Limit: $69,000 + $7,500 (catch-up) MAXIMUM AFTER-TAX $69,000 $23,000 Employer CONTRIBUTIONS FOR 2024 T. R O W E P R I C E 19
Slide 20: FAQs
FAQs Will I have to Can I contribute Are the investment Can I change open a separate to both a Roth options different for my Roth 401(k) account if I want to make Roth IRA and a Roth my Roth contributions to contributions to 401(k) in the contributions? pretax? my Roth 401(k)? same year? Yes. You ma
Slide 21: Thank You
We’re ready to help. Ask us. Thank You CCON0159295 202401- 3328539 T. R O W E P R I C E 21
Slide 22: rps.troweprice.com | 1-800-922-9945
rps.troweprice.com | 1-800-922-9945 To web meeting attendees This web meeting may be recorded and posted for other employees to access. For security reasons, please do not speak or email any personal information during this meeting. For example, you should not give your address, Social Security numb