Starting December 1, 2025, you will be able to make Roth employee after-tax contributions in addition to Traditional pre-tax employee contributions to the Joint Retirement Board for Conservative Judaism 403(b)(9) Retirement Plan (JRB 403(b) Plan). This article provides an initial introduction to Roth contributions and describes how Roth differs from pre-tax retirement contributions.
Pre-Tax vs. Roth (What’s the Difference?)
- Traditional pre-tax 403(b): Your contribution lowers taxable income in the year you make it. Your savings grow tax-deferred and withdrawals are taxable in retirement.
- Roth 403(b): Your contribution does NOT lower taxable income in the year you make it. Your savings grow tax-free and qualified withdrawals are tax-free if your first Roth contribution was at least five years ago (the 5-year rule) and you are age 59½ or older.
Employer contributions are made on a pre-tax basis and will be taxable when withdrawn, regardless of whether you contribute to Roth or Traditional pre-tax.
Required Minimum Distributions
Roth assets are exempt from Required Minimum Distributions (RMDs) during the owner’s lifetime. This allows the assets in the account to continue growing tax-free. In contrast, Traditional pre-tax assets are subject to RMDs generally beginning at age 73.
Retirement savers can contribute to both their JRB 403(b) Roth and Traditional pre-tax in the same year as long as the combined contributions are within the IRS maximum contribution limits. Having both Roth and pre-tax options can provide flexibility in retirement, allowing you to withdraw from whichever account is most advantageous based on your tax situation at the time.
Roth Rollovers
Consolidating outside Roth 401(k) and Roth 403(b) accounts from previous employers into the JRB 403(b) Plan is easy via a direct rollover. Direct rollovers are merely a matter of consolidating between different Roth accounts and do NOT create a taxable event.
Clergy Note: Parsonage and Roth
Because the JRB Plan is designated as a 403(b)(9) church plan, eligible retirement distributions for clergy can be designated as a parsonage allowance. When choosing between Traditional pre-tax and Roth, clergy need to consider the impact on the parsonage allowance. The parsonage allowance in retirement only has value when distributions are taken from a Traditional pre-tax option. Because you don’t pay taxes on Roth distributions, there are no taxes for the parsonage allowance to shield. Choosing a pre-tax option allows clergy to reduce their taxes when they make the contribution and use the parsonage allowance to reduce or eliminate taxes on retirement distributions. Please consider your own situation, especially if you use the parsonage allowance.
Side-by-Side Comparison
| Traditional (Pre-Tax) 403(b) | Roth 403(b) | |
|---|---|---|
| Taxes on Contributions | Reduces taxes on the amount contributed in the year the contribution is made | Taxes are paid on the contribution in the year the contribution is made |
| Earnings Growth | Tax-deferred | Tax-free |
| Taxes on Distributions | Taxes are paid when funds are withdrawn in retirement | No tax paid on funds distributed in retirement if 5-year rule and age 59½ are met |
| Maximum Contributions | Combined pre-tax and Roth contributions cannot exceed the annual IRS limit. | Combined Roth and pre-tax contributions cannot exceed the annual IRS limit. |
| Employer Contributions | All employer contributions are made pre-tax | All employer contributions are made pre-tax |
| Required Minimum Distributions (RMD) | RMDs begin at age 73. | RMDs not required during the original owner’s lifetime |
| Annual contribution limits | Same IRS dollar limits apply | Same IRS dollar limits apply |
Conclusion
Contributions to Roth are taxable in the calendar year you make them. Because you pay taxes when you make the contribution, the distributions are not taxed when you make withdrawals (provided you are 59½ or older and have satisfied the “5-year rule”). In addition, Roth assets are not subject to RMDs.
Getting started: The ability to make Roth contributions goes live on December 1, 2025. Please reach out to your administrator to inquire about beginning Roth contributions.
Questions? Contact JRB by email or call 888-JRB-FREE (572-3733).
This information is for general purposes only and does not constitute legal, tax or investment advice.
November 2025.