A 401(k) in-plan Roth conversion (also called an 'in-plan Roth rollover') allows Texas Instruments employees to transfer the non-Roth portion of your 401(k) account into a designated Roth account within the same plan. The amount that Texas Instruments 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 Texas Instruments 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.

Before rolling over your 401(k), take stock of the broader benefit structure Texas Instruments has in place for you. At the core of your retirement package, Texas Instruments maintains a defined benefit pension plan that has been frozen to new benefit accruals -- meaning the plan no longer accumulates future benefits for most employees, but those who were already vested may still be entitled to receive the pension benefit they accrued prior to the freeze, subject to the vesting requirements described in their plan documents, meaning the plan no longer accumulates future benefits for most employees, but those who were already vested may still be entitled to receive the pension benefit they accrued prior to the freeze, subject to the vesting requirements described in their plan documents, meaning the plan no longer accumulates future benefits for most employees, but those who were already vested may still be entitled to receive the pension benefit they accrued prior to the freeze, subject to the vesting requirements described in their plan documents. Texas Instruments also offers retiree healthcare benefits to eligible employees, which can provide meaningful coverage for those who retire before reaching Medicare eligibility at age 65. Texas Instruments's 401(k) plan includes employer matching contributions of Up to 4% matching contribution + 2% fixed employer contribution (enhanced DC plan, employees hired after Dec 31 2003), subject to plan terms. Building a retirement plan that weaves in every Texas Instruments benefit - pension, healthcare, savings - is the most reliable way to project your future income.