Author Topic: Roth 401k to Roth IRA  (Read 2185 times)

BlueLesPaul

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Roth 401k to Roth IRA
« on: October 17, 2014, 08:06:39 AM »
I rolled over my wife's Roth 401k into a traditional and a Roth IRA (Her contributions were post tax, employer's contribution were pre-tax).  I know that you can treat income rolled over from a traditional IRA to a Roth IRA as a contribution after 5 years, but is there any rule of treating money rolled over from a Roth 401k into a Roth IRA as a contribution?  Please cite IRS regs if possible.

P.S. I'm not sure if it matters, but my wife did not have a Roth IRA prior to rolling over the Roth 401k

TN_Steve

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Re: Roth 401k to Roth IRA
« Reply #1 on: October 17, 2014, 08:40:54 AM »
Here is a good overview on the five year rules, which appears to the area that you are concerned with.  I am not sure which of the five year rules you are referring to in your question (and things differ according to your wife's age), but Kitces covers both in a fairly understandable manner, and cites relevant regs and code provisions. 

http://www.kitces.com/blog/understanding-the-two-5-year-rules-for-roth-ira-contributions-and-conversions/


boarder42

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Re: Roth 401k to Roth IRA
« Reply #2 on: October 17, 2014, 08:52:45 AM »
i believe a Roth 401k is just like a Roth IRA ... so after you roll it over any contributions that were made at least 5 years ago are removable tax free.  Maybe Cheddar will weigh in. 

TN_Steve

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Re: Roth 401k to Roth IRA
« Reply #3 on: October 17, 2014, 08:58:06 AM »
i believe a Roth 401k is just like a Roth IRA ... so after you roll it over any contributions that were made at least 5 years ago are removable tax free.  Maybe Cheddar will weigh in.

Boarder, that would make sense (and was my assumption before researching it a couple years ago), but unfortunately, we are talking about US tax laws.....

From the Kitces blog link:

In the case of rollovers from a Roth 401(k), any years in the Roth 401(k) are not added to the years for the Roth IRA; thus, if the individual did not otherwise have a Roth IRA already, the rollover from a Roth 401(k) begins a new 5-year period, even if the Roth 401(k) itself had already satisfied the 5-year requirement (per Treasury Regulation 1.408A-10, Q&A-4(a)).




BlueLesPaul

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Re: Roth 401k to Roth IRA
« Reply #4 on: October 17, 2014, 04:38:58 PM »
That is what I need.  Thanks TN_Steve!

boarder42

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Re: Roth 401k to Roth IRA
« Reply #5 on: October 20, 2014, 06:13:57 AM »
well isnt that dumb.  leave it to the govt to throw common sense out the window when making laws.