roth 401k
I have a client who has a Roth 401k that she has made contributions and her employer made contributions. Can we roll over the entire amount into a Roth or does the employee and employer funds need to be separate.
I have a client who has a Roth 401k that she has made contributions and her employer made contributions. Can we roll over the entire amount into a Roth or does the employee and employer funds need to be separate.
Permalink Submitted by Alan Spross on Sat, 2010-03-06 18:20
Employer matching contributions for Roth 401k deferrals must go to the pre tax account.
Within the plan, there are no conversions possible from the pre tax account to the Roth account. The only way to add to the Roth account is through payroll deduction contributions.
With respect to the rollover of the Roth 401k funds to a Roth IRA, the usual restrictions for distributions apply while still employed by sponsoring employer. After separation from service, the Roth 401k balance can usually be transferred to a Roth IRA, as can the pre tax account. Conversion of the pre tax account will be taxable.
Not sure if this answers your question. If not, please advise.