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Deemed Roth IRA

A Deemed Individual Retirement Account (IRA) is an employer sponsored retirement plan that offers features of an IRA with voluntary contributions kept in a separate account through a retirement plan such as the KDC 401(k) Plan. In contrast, a regular IRA is opened through a bank or other financial institution. Deemed IRA contributions are not counted toward the annual contribution limits associated with the 457 and 401(k) KDC Plans and are separately accounted for in participant records.

When you contribute to the KDC Deemed Roth IRA plan, your contributions are not tax deductible but your earnings grow tax free and there is no tax on qualified distributions as well as no mandatory distribution age.

Remember, investing involves market risk, including the possible loss of the money you have saved. As you get started in the plan, we will help you understand market risk and strategies that may help you deal with it.

Additional Deemed Roth IRA features

In addition to tax-free growth, the Deemed Roth IRA plan also offers these features, and more: 

  • Contributions do not have to be payroll deducted. A direct pay option is available as well as payroll deduction, provided your employer is willing to withhold it. They are subject to IRA annual limits but do not count toward the annual 457/401(k) plan annual limits. 
  • Catch-up contributions – you can take advantage of the age 50 or older catch-up option to catch-up and contribute more to your plan. 
  • Rollovers – you can roll money into your Deemed Roth IRA but only a direct rollover from another Roth 401(k) or Deemed Roth IRA account. See the plan comparison chart (PDF) for more information.

For a complete look at all of the KDC Deemed Roth IRA plan features, benefits and restrictions take a look at the plan comparison chart (PDF).

Qualified retirement plans, deferred compensation plans and individual retirement accounts are all different, including fees and when you can access funds. Assets rolled over from your account(s) may be subject to surrender charges, other fees and/or a 10% tax penalty if withdrawn before age 59½. Neither Nationwide® nor any of its representatives give legal or tax advice. Please contact your legal or tax advisor for such advice.

Get the help you need

Talk to one of our local Plan Service Representatives if you have questions about plan options.

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