A Roth account may also be included in the illustration, and increasing contributions to the Roth account can optionally be included to resolve the potential shortfall. The following options are used to configure how the Roth contributions are used for calculating any shortfall.
Include increased deferrals to Roth account for solving shortfall
Checking this box will also illustrate funding the shortfall with increase deferrals to the Roth account.
| Notes: | The Batch Gap calculator does not consider taxation when calculating income needed during retirement. |
To include a Roth account for retirement income, the following conditions must be met:
1.The employer file must be configured with a visible Roth account.
2.If the employer file is configured with a custom retirement plan, the plan must be configured with a Roth account.
Funding Shortfall Option
When increased funding is required and the Roth account is selected as part of the solution, one of three methods can be selected for determining the allocation of increased contributions between the two accounts:
1.Contributions to each account are increased proportionally. For example, if the client is contributing 10% to the pretax account and 5% to the Roth account, and their contribution needs to increase by 6%, the pretax account would increase to 14% and the Roth account would increase to 7%.
2.Contributions are increased equally to each account. In the above example, the contributions would increase to 13% for the pretax account and 8% for the Roth account.
3.Increased contributions only to the Roth account.
| Note: | Distributions from the pretax and Roth accounts will be proportionally based on their balances. |
