Whether to move funds from Roth in-plan conversion in 401k to Roth IRA.

[grenzbegriff]

I have both a Roth IRA and 401k, and am in FIRE-mode, low income, so have been converting pre-tax money to Roth.  Some of the money in the 401k I just converted to Roth with in-plan conversion.  I didn't know this was possible until this time around.  In the past I called vanguard and had them move the money from pre-tax in 401k to the Roth IRA directly when I wanted to pay tax on it and get it "rothed". 

Now I'm wondering if I should move my Roth 401k money to Roth IRA.  As I understand it right now:

Pros of money in Roth 401k:
- it lets me invest in VFFSX, so 0.01% expense ratio, while in the Roth IRA cheapest expense ratio is 0.04%. 

Pros of money in Roth IRA:
- after 5 years in the Roth IRA, I can withdraw the contributions penalty free

Questions:
1. Will that 5 year timer start when I move the money from the 401k to the Roth IRA?  I assume there's a separate timer for each chunk of money in the Roth IRA depending on when it was contributed or rolled into it.
2. I assume that I can decide to move the Roth 401k money to Roth IRA at any time in the future, with no penalty or tax implications, it doesn't have to be done soon after converting it from pre-tax to Roth within the 401k?
3. If I move Roth 401k money to Roth IRA in say, ten years, will the growth of the Roth 401k money be considered a contribution into the Roth IRA, in the sense that I can withdraw it five years after that without penalty?  This seems unlikely but if true would be a big pro to keeping it in the 401k for now.

As I understand it right now, the only advantage in moving it to the Roth IRA would be if I wanted to use it before I'm 59.5, or rather, without having to wait 5 years after moving it - since if I did want to withdraw it, I could always move it and wait 5 years and then withdraw it.  I don't intend or expect to, but having that flexibility is nice of course.  The downside is I'd be paying roughly $1/year in expense ratio for every $3k in that flexible pool.  It's a small amount but it is something -- suppose I moved all 300k into the Roth IRA, and never withdrew it until after I'm 59.5, I'd have spent ~$100/yr * 26 years = ~$2600 (plus growth) on the luxury of having that flexibility that I probably won't use.

[MustacheAndaHalf]

Retirement plan rules are setup by the IRS, so people in the "taxes" area tend to be better able to answer Roth questions like yours.

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Over 30 years, a 0.02% expense ratio difference compounds to be 0.6% of the total.  It would be like having $1,006,000 versus $1,000,000 after 30 years of compounding.  I think your preference for VFFSX vs VOO probably won't matter to your retirement.

[seattlecyclone]

When you make an early withdrawal from a Roth 401(k) the withdrawal is prorated between contributions (which are tax-free) and earnings (which are taxed at your normal marginal rate + 10%). This differs from the Roth IRA early withdrawal rules where the contributions all come out first (for free) and then you only dip into the earnings when the contributions are used up. For this reason it can be advantageous to roll your Roth 401(k) into your Roth IRA before you start withdrawing.

When you do a Roth 401(k) -> Roth IRA rollover the amount that you contributed to the Roth 401(k) is treated the same as if you contributed it directly to the Roth IRA, and the amount of growth that happened in the 401(k) will be treated the same as growth that happened in the IRA. The rules around what happens when you do a pre-tax-to-Roth in-plan conversion and then roll it into a Roth IRA and then withdraw the money within five years of the in-plan conversion are a bit unclear to me.