p-pflroth-pres-all rps 112818 the roth option. 2 what is the roth option? unlike a traditional...

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P-PFLROTH-PRES-all RPS 112818 The Roth Option

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Page 1: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

P-PFLROTH-PRES-all RPS 112818

The Roth Option

Page 2: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

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What is the Roth option?

• Unlike a traditional pre-tax workplace retirement account, a Roth workplace retirement account lets you make contributions with after-tax dollars, allowing for tax-free withdrawals in retirement.*

• You choose how much you contribute.

• Unlike a Roth IRA, there are no income requirements for a Roth workplace retirement account.

• You can make both pre-tax and Roth after-tax contributions to your workplace retirement account at the same time.

*A distribution is not subject to income tax if the Roth account has been in place for at least five tax years and the distribution is made on or after the attainment of age 59½, or is due to disability or death.

Page 3: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

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Comparing workplaceretirement plan accounts.

Traditional vs. Roth contributions

Benefit Traditional pre-tax Roth after-tax

Tax-deferred contributions? Yes No

Tax treatment of earnings? Tax deferred Tax free

Tax-free distributions?* No Yes

Required minimum distributions in retirement?

Yes Yes

*A distribution is not subject to income tax if the Roth account has been in place for at least five tax years and the distribution is made on or after the attainment of age 59½, or is due to disability or death.

Page 4: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

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How do you know if the Roth option is right for you?

Paying taxes now at a lower rate with a Roth after-tax retirement account

Higher than your current

tax bracket

Either type of account, since both will generally yield the same after taxes

The same as your current

tax bracket

Deferring taxes until retirement with a traditional pre-tax retirement account

Lower than your current

tax bracket

What tax bracket do you think you’ll be in when you retire?

When deciding which type of retirement account may be better for you, ask yourself:

If your retirement tax You might consider:

bracket will be:

Page 5: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

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Traditional vs. Roth contributions

Traditional pre-tax Roth after-tax

Gross annual pay $25,000 $25,000

Pre-tax contribution1 -$1,500 $0

Total before taxes1 $23,500 $25,000

Federal income tax (25%) -$5,875 -$6,250

Total pay after taxes $17,625 $18,750

Roth contribution2 $0 -$1,500

Take-home pay $17,625 $17,250

How will the Roth option affect your paycheck?

This hypothetical example assumes a federal income tax rate of 25%.Your own personal situation may vary.

1This contribution and any resulting earnings will be taxed upon withdrawal from the retirement account. 2This contribution and any resulting earnings will not be subject to taxation upon withdrawal so long as five years have passed from the year of the initial contribution and you are age 59½ or disabled or deceased.

Page 6: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

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Things to consider.

• Your future tax rate

• Your current ability to contribute

• Your time frame to retirement

Page 7: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

TAX Rates in HistoryT

op

Tax

Rat

e

Since 1913, the top federal income tax rate has changed 37 times – an average of once every 2.7 years

1913 2011

Highest top tax rate in history

94%

1944

67%

Source: U.S. Federal Income Tax 1913-2011. Tax Foundation.

1971 19881925 1954

Page 8: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

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About The Hartford.

• Trusted since 1810

• 40 years experience helping Americans retire better through workplace retirement plans

• One of the World’s Most Ethical Companies (Ethisphere Institute, 2008, 2009 and 2010)

• Here to help at every stage of the retirement planning process – in person, in print and online

Page 9: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

Important Information

Many tax planning strategies emphasize the deferral of current income taxes, on the basis that your federal income tax rate may be lower at retirement. Please keep in mind that federal income tax rates are unpredictable and may be higher when you take a distribution than at the time of deferral. Other factors, including state tax rates and your income, may also affect your overall tax rate upon distribution. Please consult with your tax advisor for individual tax planning strategy and advice. The Hartford does not predict or in any way guarantee favorable tax results.

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. This information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

Page 10: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

© 2012 The Hartford, Hartford, CT 06115

Important information.

Before investing, you should carefully consider the investment objectives, risks, charges and expenses of the mutual funds or The Hartford's group variable annuity products and funding agreements, and their underlying funds. For fund and product prospectuses and/or a disclosure document containing this and other information, contact your financial professional or visit our website. Read them carefully.

"The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries, including Hartford Life Insurance Company, Hartford Retirement Services, LLC (“HRS”), and Hartford Securities Distribution Company, Inc. (“HSD”). HSD (member FINRA and SIPC) is a registered broker/dealer affiliate of The Hartford. Retirement programs can be funded by group fixed or variable annuity products and funding agreements issued by Hartford Life Insurance Company (Simsbury, CT). Group variable contracts are underwritten and distributed by HSD, where applicable. HRS and HSD offer certain service programs for retirement plans through which asponsor or administrator of a plan may also invest in mutual funds on behalf of plan participants.

Page 11: P-PFLROTH-PRES-all RPS 112818 The Roth Option. 2 What is the Roth option? Unlike a traditional pre-tax workplace retirement account, a Roth workplace

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