My Google skills are failing me this morning and I'm hoping someone can help me out. I'm trying to run the number on setting up a Roth pipeline when I hit my FI number. The part that I'm tripping over is how a Roth 401k would be handled if I rolled it over into my Roth IRA. Everything I'm finding is for rolling a regular 401k into a Roth IRA.
Here are the assumptions I'm working with:
-Both Roth IRA and Roth 401k will have been established for over 5 yrs
-I will be 47yo when I retire and start drawing down my portfolio
If I had 100K in the Roth 401k that was 80K of my contributions and 20K of appreciation, and I rolled it all over to the Roth IRA. How much of the Roth IRA could I withdraw without penalty and taxes? Is it just 80K (my original contribution), 100k (my contribution to the IRA) or some other number that I'm not understanding?
Assuming you're not disabled at the time of the rollover, you will be able to withdraw only the contribution to the Roth 401(k) tax-free after rolling into a Roth IRA. Rolling your Roth 401(k) into the Roth IRA starts a new five-year clock on the withdrawing the $20k earnings from your Roth 401(k). This second point is not critical for you, since you state you'll be 47 at the time of the rollover, so you can't touch the contributions tax- and penalty-free until the year you turn 59.5 either way.
There's a bit about this on this forum
here and probably others. There's also
this (pdf) I found that was informative. In addition, I suggest you spend some time with
IRS Publication 590. Always keep in mind you're asking for tax advice from people on the internet and you should do more research and (possibly) seek help from a tax professional.
