after tax options
I have a client who has a 401k to rollover part is pretax and part after tax. Can the after tax be rolled into a Roth or traditional IRA. If so how are future withdrawals calculated for tax if it is rolled into a Traditional IRA. If the client elects to have the 401k after tax contributions sent to the client is this a taxable event if the earnings are not included. Thanks.
Permalink Submitted by Alan - IRA critic on Mon, 2017-03-20 23:20
Client can request a single distribution which directs the after tax contributions to the Roth IRA and the pre tax balance to a TIRA. This is by far the best option unless he needs money to spend fairly soon. In that case he should ask for a check for the after tax plan balance instead of rolling it to the Roth IRA. Neither of these options would be currently taxable.