A 401(k) in-plan Roth conversion (also called an 'in-plan Roth rollover') allows Monsanto employees to transfer the non-Roth portion of your 401(k) account into a designated Roth account within the same plan. The amount that Monsanto employees convert is subject to federal income tax in the year of the conversion (except for any nontaxable basis you have in the amount transferred), but qualified distributions from the Roth account in the future are entirely income tax-free. The 10% early distribution penalty doesn't apply to amounts you convert (but that tax may be reclaimed by the IRS if you take a non-qualified distribution from your Roth account within five years of the conversion).
What part of my account can I convert?
Assuming your Monsanto 401(k) allows in-plan conversions (plans aren't required to), you can convert any vested part of your 401(k) plan account into a designated Roth account regardless of whether you're otherwise eligible for a plan distribution.
Keep in mind that if you're entitled to an eligible rollover distribution, you can always roll those dollars into a Roth IRA instead of using an in-plan conversion.
What else do I need to know?
If you have the choice of an in-plan conversion or a rollover to a Roth IRA, which should you choose? There are a number of factors to consider:
- In general, the investments available in an employer 401(k) plan are fairly limited, while virtually and type of investment is available in an IRA (on the other hand, your 401(k) plan may offer investments that you can't replicate in an IRA, or that aren't available at similar cost).
- An IRA may give you more flexibility with distributions. Your distribution options in a 401(k) plan depend on the terms of that particular plan, and your options may be limited.
- Finally, 401(k) plans typically enjoy more protection from creditors under federal law than do IRAs (consult a professional if creditor protection is important to you).
Caution: When evaluating whether to initiate a rollover from an employer plan to an IRA, always be sure to (1) ask about possible surrender charges that may be imposed by your employer plan, or new surrender charges that your IRA may impose, (2) compare investment fees and expenses charged by your IRA (and investment funds) with those charged by your employer plan (if any), and (3) understand any accumulated rights or guarantees that you may be giving up by transferring funds out of your employer plan.
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What is the purpose of Monsanto's 401(k) Savings Plan?
The purpose of Monsanto's 401(k) Savings Plan is to help employees save for retirement by allowing them to contribute a portion of their salary into a tax-advantaged retirement account.
How can I enroll in Monsanto's 401(k) Savings Plan?
Employees can enroll in Monsanto's 401(k) Savings Plan through the company's HR portal or by contacting the HR department for assistance.
What types of contributions can I make to Monsanto's 401(k) Savings Plan?
Employees can make pre-tax contributions, Roth (after-tax) contributions, and possibly catch-up contributions if they are age 50 or older in Monsanto's 401(k) Savings Plan.
Does Monsanto offer any matching contributions to the 401(k) Savings Plan?
Yes, Monsanto offers a matching contribution to the 401(k) Savings Plan, which can vary based on employee contributions and company policy.
What is the vesting schedule for Monsanto's 401(k) Savings Plan?
The vesting schedule for Monsanto's 401(k) Savings Plan typically outlines how long an employee must work at the company to fully own the employer's matching contributions, which may vary based on tenure.
Can I take a loan from my Monsanto 401(k) Savings Plan?
Yes, employees may have the option to take a loan from their Monsanto 401(k) Savings Plan, subject to specific terms and conditions outlined in the plan documents.
What investment options are available in Monsanto's 401(k) Savings Plan?
Monsanto's 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and possibly company stock, allowing employees to diversify their portfolios.
How often can I change my contribution amount to Monsanto's 401(k) Savings Plan?
Employees can typically change their contribution amount to Monsanto's 401(k) Savings Plan at any time, subject to the plan's guidelines.
When can I access my funds from Monsanto's 401(k) Savings Plan?
Employees can access their funds from Monsanto's 401(k) Savings Plan upon reaching retirement age, termination of employment, or under certain hardship circumstances as defined by the plan.
What happens to my Monsanto 401(k) Savings Plan if I leave the company?
If you leave Monsanto, you can choose to roll over your 401(k) savings into another retirement account, leave it in the plan if allowed, or cash it out, subject to taxes and penalties.