1) I can pull out the ENTIRE Roth IRA (which I had rolled from the Roth 401k) after 5 tax years with no tax / penalty implications
Not quite. Whatever amount you originally contributed to the Roth 401(k) counts the same as Roth IRA contributions when you roll it over. This amount can be withdrawn at any time with no tax or penalty due. Any subsequent growth either in the Roth 401(k) or Roth IRA is generally taxed at your marginal rate plus 10% if withdrawn prior to age 59½.
2) I will also have flexibility to convert portions of the Traditional IRA (which is just my rolled over pre-tax 401k money) into a Roth IRA, keeping in mind effective tax exposure (i.e. staying within certain tax bracket thresholds) --> And whatever funds I convert into the Roth IRA in a given year, those funds will similarly become available after 5 tax years with no tax / penalty implications
Yes.
I guess a fundamental question here... When you roll over a 401k balance into IRAs, is the entire initial balance that you transfer (so let's say I rollover $500K in 401k funds) considered a "contribution" (so that entire initial $500K). I ask because that 401k balance reflects 6 sources of money:
No, it's all a rollover. It doesn't eat into your IRA contribution limit at all.
1) My pre-tax contribution from my paycheck
2) Earnings on pre-tax contribution
3) My Roth contribution from my paycheck
4) Earnings on the Roth contributions
5) Company match
6) Earnings on company match
Items 1, 2, 5, and 6 are all pre-tax funds. There's no real difference whether this pre-tax money is a "contribution" or "earnings" or anything. It's all taxed at your marginal rate if you withdraw it or convert it to Roth, and there's a 10% early withdrawal tax that generally applies for a direct withdrawal prior to 59½.
Item 3 will count as a "contribution" for the purpose of the Roth IRA ordering rules, and Item 4 will count as "earnings."
