Roth contributions is another tax-advantaged savings option, allowing you to potentially benefit from tax-free withdrawals in retirement.

How Roth Contributions Work

• You can contribute a percentage of your pay or a specified dollar amount to your 457(b) plan as a Roth contribution.
• Roth contributions are made on an after-tax basis and will not reduce your income taxes for the year (unlike pre-tax contributions).
• Roth contributions and associated earnings can be withdrawn tax-free if the requirements for a qualified distribution are met.

Qualified Tax-Free Distributions

Distributions of Roth assets are tax-free if the following conditions are met:

• You have held your Roth account for at least five years, starting from Jan. 1 of the year you made your first Roth contribution.
• You are age 59 1/2 or older, disabled, or deceased.

You are eligible for distributions upon separation from service with your employer. While employed, withdrawal options are limited but may be available in certain cases, such as unforeseeable emergencies or after age 70 1/2.

If the requirements for a qualified distribution are not met, and the assets are not rolled into another eligible plan, the earnings portion of any distribution will be taxable.

Benefits of Roth Contributions

In addition to potentially tax-free withdrawals in retirement, Roth contributions allow for:

• Higher contribution limits than Roth IRAs — 457(b) plans allow for greater after-tax savings. See the annual contribution limits for more information.
• Eligibility at all income levels — Unlike with Roth IRAs, your ability to make Roth contributions to a 457(b) plan doesn’t depend on your income.
• Tax planning and flexibility — Having both pre-tax assets and Roth assets available as sources of retirement income creates additional flexibility when managing tax liabilities during retirement.

457(b) Contributions: Pre-Tax or Roth?

Consider your financial situation, including your current and expected income tax brackets in retirement. Roth contributions may be most appropriate for individuals who are expecting to be in a higher tax bracket in retirement, allowing them to pay taxes on the contributions now, at a lower tax rate, and receive tax-free distributions in retirement. Depending on your finances and savings goals, you can weigh whether you are able to use both options to diversify the tax treatment of savings. Use the Roth Analyzer tool to evaluate pre-tax versus Roth contributions.

Roth Catch-Up Contribution Thresholds: Ages 50 and 60–63

Starting in 2026, employees whose Social Security wages from the prior year with their current employer exceed the Roth catch-up wage threshold ($150,000 in 2025) must designate age 50 or age 60–63 catch-up contributions as Roth contributions. If a plan does not allow Roth contributions, those employees will be ineligible to make catch-up contributions. Participants who do not have Social Security wages with their current employer, or whose wages fall below the threshold, may voluntarily designate catch-up contributions as pre-tax, Roth, or a combination of both.

What Is a Roth Account in a 457(b) Plan?

Roth contributions and their earnings are held in a recordkeeping account, known as a Roth account, within your 457(b) plan. This account is used to segregate assets that have a different tax treatment from other plan assets, such as pre-tax contributions.

A Roth IRA is a different type of retirement savings vehicle. For additional information about IRAs available through MissionSquare Retirement, please visit our IRA page.