A designated Roth contribution is money that an employee chooses to put into a retirement plan from their paycheck on an after-tax basis. This means the employee pays taxes on the money now, but the contributions and any investment growth can later be withdrawn tax-free in retirement, as long as certain conditions are met. These contributions are kept separate from traditional (pre-tax) contributions in the plan, and the employee can often choose how much to contribute to each type. Roth contributions are a way to lock in today’s tax rate in exchange for potential tax-free income later.
Glossary Term
Designated Roth Contribution
Last updated: July 16, 2025 Published: July 16, 2025
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