FORUM Private Client Group

11313 USA Parkway
Fishers, IN 46037

Basic Retirement Planning


  1. RMDs are waived in 2020 due to the CARES Act.
  2. Employer contributions and earnings are taxable when distributed.
  3. SEP/SIMPLE IRAs and amounts rolled over to an IRA from an employer qualified plan or 403(b) plan, plus any earnings on the rollover, aren't subject to this dollar cap and are fully protected under federal law if you declare bankruptcy. This amount is scheduled to be adjusted for inflation in April 2022.
  4. Or from the time you contributed to a previous employer's Roth 401(k) plan, if you rolled over your balance from that plan to the current plan.
  5. Depending on plan terms. Taxes and potential penalties apply to earnings paid in a nonqualified distribution. Special withdrawal provisions may apply in 2020 due to the CARES Act.
  6. Taxable conversion.
  7. Choices will depend on IRA trustee/custodian. 

Differences Between a Roth 401(k) and a Roth IRA

Roth 401(k) Roth IRA
Maximum contribution (2020) Lesser of $19,500 or 100% of compensation Lesser of $6,000 or 100% of earned income
Catch-up contribution if age 50 or older (2020) $6,500 $1,000
Who can contribute? Any eligible employee Only taxpayers who earn less than:
  • Single/Head of household: $139,000
  • Married (filing jointly): $206,000
  • Married (filing separately): $10,000
Lifetime required distributions after age 72?1 Yes No
Potential employer matching contribution? Yes 2 No
Federal bankruptcy protection Unlimited $1,362,800 (all IRAs aggregated) 3
Loans available? Yes, if plan permits No
Five-year waiting period for qualified distributions? Yes, from time you contribute to the plan 4 Yes, from time you contribute to ANY Roth IRA
Distributions 5 Upon termination of employment, age 59½, hardship, disability, and death Any reason
Qualified tax-free distributions 5 59½, disability, and death 59½, disability, death, first-time homebuyer (up to $10,000 lifetime)
Nonqualified distributions Pro-rata distribution of tax-free contributions and taxable earnings Tax-free contributions distributed first, then taxable earnings
Rollovers To a Roth IRA, Roth 401(k), or Roth 403(b); from a Roth 401(k) or Roth 403(b) To and from a Roth IRA; from a Roth 401(k) or Roth 403(b); from a traditional IRA, 401(k), 403(b) or 457(b) 6
Investment choices Limited to investments offered by employer Virtually unlimited7

IMPORTANT DISCLOSURES Broadridge Investor Communications, Solutions, Inc. and FORUM Private Client Group are separate and unaffiliated entities. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

This communication is strictly intended for individuals residing in the state(s) of AL, AZ, CA, FL, IL, IN, MI, SC, TN and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.