Take advantage of the DC Plan After-tax Account

In addition to pretax savings through the 403(b) and 457(b) plans, the UC Retirement Savings Program offers you the opportunity to save with after-tax contributions through the DC Plan. You can access your money at any time; pay taxes on contributions now and you pay taxes only on the investment earnings when you take the money out.

Benefits of investing after-tax dollars in the DC Plan

If you’ve never considered making after-tax contributions to the DC Plan, these advantages may have you looking at the plan in a whole new way.

  • Tax diversification. Pay taxes on the contributions now, instead of when you take the money out. Investment earnings grow tax-deferred.
  • Higher contribution limits. Save up to $57,000 in the DC Plan (2020 limit).1 All DC Plan contributions (pretax and after-tax) count towards the $57,000 limit. This includes contributions made by you and UC in the Pension Choice DC Supplement or Savings Choice accounts.
  • Liquidity. Access your money at any time (applicable earnings subject to taxes and possible early withdrawal penalties if not rolled over).
  • Flexible savings and investing vehicle. Convenient payroll deductions can be invested in the wide range of low cost UC investment options.
  • Estate planning. Potentially pass on your after-tax DC Plan contributions to beneficiaries.
  • Option to convert to a Roth IRA through a rollover. After-tax money in the DC Plan that is converted into a Roth individual retirement account (IRA) may be withdrawn tax-free in retirement, provided that certain conditions are met.2 Consult a tax professional regarding your specific situation. Learn more about Roth IRA conversion rollovers.

Ready to make after-tax contributions to your DC Plan account?

You can start making after-tax contributions to the DC Plan at any time. Just log in to NetBenefits.com or call Fidelity at 800-558-9182. Contributions are deducted from your paycheck on an after-tax basis and posted to your DC Plan After-tax Account.

How the DCP After-tax Account can meet a variety of needs

Remember, you should contact a tax professional to find out if a Roth IRA conversion rollover is right for you and how it works with your DC Plan After-tax Account.