Department of Employee Trust Funds
August 11, 2011
WDC Roth Option Now Available
Now you can make Wisconsin Deferred Compensation contributions
with after-tax dollars, as opposed to just pre-tax.
The WDC Roth option allows you to contribute to your WDC account
with after-tax dollars. No taxes are withheld from your Roth contributions
or their earnings when you take a distribution, as long as you hold
the Roth for five years, attained the age of 59½ and have
a qualifying reason. You may designate all or a portion of your
WDC contributions as a Roth deferral. The WDC Roth deferral allows
you to pay taxes on your contributions when they are contributed.
The WDC Roth deferral essentially “locks in” today’s
tax rates on your contributions. If you expect to be in a higher
tax bracket when you retire, Roth contributions may also make sense.
You may contribute a maximum of $16,500* to your WDC account. That
includes both before- and after-tax contributions. You may also
roll over designated Roth 401(k), Roth 457 or Roth 403(b) plan amounts
to the WDC.
You may take your Roth account funds after the Roth account has
been established for at least five tax years and you either:
- reach age 59½;
- separate from service; or
- become disabled.
Note: If you take a distribution before you’ve held the Roth
monies for five years, your account earnings are subject to ordinary
income tax (state and federal).
If you have more questions or would like additional information
about the WDC Roth feature, please review the Roth information on
the WDC's website at www.wdc457.org
or contact the WDC directly at (877) 457-9327, option 0, to speak
to a WDC representative anytime between 7 am and 7 pm, Monday through