Roth and Pre-Tax Options Available
Through the Cox 401(k) Plan, you can choose to contribute on a pre-tax or post-tax (Roth) basis regardless of your income level.
You can take the money out tax-free in retirement —both contributions and any earnings—provided you meet two conditions.* Roth contributions are taken after taxes and do not lower your income tax in the current year.
Pretax contributions lower your overall taxable income in the current year. You will not pay income taxes on your contributions and earnings until you receive distributions from the Plan.
*Taxes: Taking money from your retirement account can affect how much you’ll have to pay in taxes. You’ll owe taxes on pre-tax money. You won’t owe taxes on Roth earnings as long as you are age 59½ or older and it’s been at least five years since your first Roth contribution. If required by law, Vanguard will withhold some taxes for you. You may need to pay a 10% federal penalty tax if you take money out early.