Roth 401k question

[midwestheel]

Having newly found this forum and MMM, I apologize for this question if it is deemed elementary.  If it is, please feel free to send me on my merry way with a link where I can read up on this. I just figured you all would be a wealth of knowledge, so thanks in advance.

I have a Roth 401k through my employer, as well as another Roth IRA through Vanguard. With the goal to retire in 20 years (currently 35), am I able to access my Roth 401k before 59.5, penalty-free? Are Roth 401ks treated the same as a Roth IRA when it comes to accessing contributions?

[VoteCthulu]

Most 401k plans have their own rules for when and how withdrawals can be made, but after you quit you should be able to roll it into an individual Roth account and then take out your principal after 5 years.

This is probably a question best asked to a fee-only advisor who can look at your 401k rules in detail, though.

[sherr]

I don't actually know the direct answer to your question, but when you leave your employer you can roll the Roth 401k into your Roth IRA. So just do that, and then they are the same thing.

[braje]

It you terminate your employment at 55 or old you can access your 401(k) without penalty.

[seattlecyclone]

Having newly found this forum and MMM, I apologize for this question if it is deemed elementary.  If it is, please feel free to send me on my merry way with a link where I can read up on this. I just figured you all would be a wealth of knowledge, so thanks in advance.

I have a Roth 401k through my employer, as well as another Roth IRA through Vanguard. With the goal to retire in 20 years (currently 35), am I able to access my Roth 401k before 59.5, penalty-free? Are Roth 401ks treated the same as a Roth IRA when it comes to accessing contributions?

I second the recommendation to roll your Roth 401(k) into your Roth IRA once you retire, unless you're at least 55 years old when you quit. The reason is that withdrawals from the two types of accounts are treated a little bit differently.

The IRA is better for most because it has a strict ordering for early withdrawals: contributions first (always tax-free), conversions next (tax-free after five years), earnings (taxable) last. When you withdraw directly from the Roth 401(k), any early distribution is pro-rated between contributions and earnings, so you'll always be paying some tax. You can get around this issue by rolling your Roth 401(k) into your Roth IRA and then withdrawing from the Roth IRA.

[midwestheel]

Is there an issue rolling a Roth 401k into a Roth IRA because on contribution limits?

[seattlecyclone]

Nope. Rollovers are not subject to income limits and do not count against contribution limits.