The Faculty and Staff Retirement Plan allows you to contribute on a Roth after-tax basis, in addition to your regular pre-tax contributions to the Plan.  Your combined pre-tax and Roth after-tax contributions are subject to the same annual IRS-established maximum limit.

Roth contributions are made on an after-tax basis, so they are taxed according to your current tax rates, and you can make tax-free withdrawals later in retirement after meeting certain criteria.  Roth contributions in the 403(b) Plan are different from a Roth IRA and not subject to the same income limits.

Under changes made in the SECURE 2.0 Act, participants who are turning age 50 or older in 2026 and earned more than $150,000 in FICA wages in 2025, must make catch-up contributions on a Roth basis. A higher catch-up contribution limit applies for employees who are ages 60 to 63.

Meet with your tax advisor or a Fidelity financial representative to discuss whether the Roth 403(b) is right for you.

What are Roth Contributions?

You may designate a percentage or dollar amount of your paycheck to be contributed to your Faculty and Staff Retirement Plan as a Roth contribution. Roth contributions are considered optional and are made on an after-tax basis. Roth accounts were designed to combine the benefits of saving in your tax-deferred retirement plan with the advantage of avoiding taxes on your money when you make withdrawals in retirement.

How Roth Contributions Work

Think of contributions to the Faculty and Staff Retirement Plan as having two separate buckets: pretax and Roth.

When you retire or leave your employer, earnings on your Roth contributions can be withdrawn tax-free as long as:

It has been five tax years since your first Roth contribution.

You are at least 59½ years old.

In the event of your death, beneficiaries may be able to receive distributions tax-free if you had started making Roth contributions earlier than five tax years prior to the distribution. In the event of disability, your earnings can be withdrawn tax-free if the date of withdrawal has been at least five tax years from your first Roth contribution.

Roth contributions will change your take-home pay

Because Roth 403(b) contributions are under the same IRS limits as pre-tax contributions to the Faculty and Staff Retirement Plan, each dollar of a Roth contribution reduces the amount that can be contributed pre-tax and vice versa.

Your take-home pay will be less than it would be if you made an equivalent pre-tax contribution because income taxes must be withheld and paid on after-tax Roth 403(b) contributions.

Roth contributions fall under the same IRS limits as pre-tax contributions to your 403(b) plan.

  • In 2026, the total combined IRS contribution limit for Roth and/or traditional pre-tax contributions is $24,500.
  • Effective January 1, 2026, The SECURE 2.0 Act includes a mandatory provision requiring that if a participant earns more than $150,000* in FICA wages in the 2025 calendar year, all catch-up contributions at age 50 and older must be on a Roth basis
  • If you are age 50 or older in the calendar year, you may make an additional catch-up contribution of $8,000 in 2026, bringing your Roth and/or traditional pre-tax contributions to $32,500 for the year.
  • If you are age 60 to 63 and participate in an eligible plan, for 2026, the catch-up contribution limit is $11,250 instead of $8,000 bringing your Roth and/or traditional pre-tax contributions to $35,750.

How to Enroll for Roth 403(b) Contributions

Signing up for Roth contributions is easy. Click here for more information.

Example

Roth 403(b) Contribution example chart

Example: Sophia and Fred each contribute $3,600 a year to the 403(b) Plan, and both earn 6% annually on their investments. But Sophia makes pre-tax contributions while Fred makes Roth contributions. (That means Fred's contributions are taxed as regular income before being added to his account.) After 30 years each has $284,609 for retirement. However, Sophia will owe taxes on her withdrawals. Fred's withdrawals will be tax-free.*

This hypothetical illustration does not represent any particular investment.

* Fred paid $16,200 in taxes on contributions over 30 years, assuming a 15% tax bracket. All tax references apply to federal taxes only. Individual state tax laws may vary.

** The amount of taxes owed will depend on the tax rate at the time of the distribution and the amount withdrawn.

What are the similarities and differences between Roth contributions and traditional pre-tax contributions?

Roth contributions are similar to traditional pre-tax contributions in the following ways:

  • You elect how much of your salary you wish to contribute.
  • Your Roth and traditional pre-tax contributions cannot exceed IRS limits.
  • Your contribution is based on your eligible compensation.

But, unlike traditional pre-tax contributions, Roth contributions allow you to withdraw your money tax free when you retire.  Income taxes will be withheld from your after-tax Roth contributions, so your take-home pay may be less than it would be if you made an equal traditional pre-tax contribution.

How are Roth contributions to the Faculty and Staff Retirement Plan different from Roth IRA contributions?

A Roth IRA (individual retirement account) is an account that is outside your Faculty and Staff Retirement Plan, whereas Roth contributions exist within your Faculty and Staff Retirement Plan. You may contribute to a Roth IRA only if your adjusted gross income falls below a certain amount. There are no adjusted gross income limits for Roth contributions to your Faculty and Staff retirement plan.

Contributions to both your Faculty and Staff retirement plan and your Roth IRA have annual contribution limits.

The 2026 contribution limit for a Roth IRA is $7,500 per year, or $8,600 if you are age 50 or older and eligible to make catch-up contributions.

The combined IRS contribution limit for both Roth and traditional pretax contributions in the Faculty and Staff retirement plan if you are under age 50 is $24,500. If you are over age 50 and eligible to make a $8,000 catch-up contribution, the combined limit is $32,500.

If you are age 60 to 63 and eligible to make a $11,250 catch-up contribution, the combined limit is $35,750.

With a Roth IRA or Roth contributions to your Faculty and Staff retirement plan, you do not have to take a required minimum distribution (RMD) during your lifetime.

Please speak with your tax advisor regarding the impact of SECURE 2.0 on future RMDs.

If I am already contributing $7,500 per year to a Roth IRA, am I still allowed to make pre-tax and Roth deferral contributions up to the $24,500 annual limit for 2026?

Yes. You may make pre-tax and Roth deferral contributions up to the annual limit ($24,500 for 2026, or more if you are catch-up eligible), even if you have already contributed the annual maximum amount to a Roth IRA.

What are the conditions for tax-free withdrawals?

In general, to make a qualified tax- and penalty-free withdrawal of Roth contributions and earnings, the following conditions must be met:

  • the account must have been established for at least five years, and
  • the withdrawal must be taken at or after age 59 1/2, or as the result of disability or death.

Distributions that don't meet these conditions are considered nonqualified and may be subject to taxes and penalties.

When does the five-year period begin?

It begins on January 1 of the year you make your first Roth contribution, which can be made at any time during the year. Even if you contribute in December, you will still receive a year's credit. Also, you don't have to make a contribution every year. Your first contribution "starts the clock."

What if a withdrawal doesn't meet these conditions?

Withdrawals that do not meet these conditions are considered nonqualified withdrawals. Nonqualified withdrawals are treated as a prorated return of Roth contributions and earnings. The portion of the distribution that represents earnings will be subject to ordinary income tax and possibly a 10% federal penalty tax for early distributions. However, the portion of the withdrawal that represents a return of Roth contributions would not be subject to tax.

Can I convert my pre-tax 403(b) balance to Roth after-tax?

This feature is not currently available.

Do I have to take required minimum distributions (RMDs) from my Roth 403(b)?

No, SECURE 2.0 eliminates required minimum distributions for Roth accounts in employer plans, effective for taxable years beginning after December 31, 2023. For questions about how this legislative change might impact your retirement planning, please consult with your tax advisor or financial planner.