Roth 401k rollover and subsequent distributions

Client is age 60.  Has had a Roth IRA for more than 5 yrs.  Currently employed and has a Roth 401k.  If he does an in-service withdrawal and rolls his Roth 401k to his existing Roth IRA, can he immediately take a tax free distribution from the Roth IRA for an amount that exceeds the pre rollover value of the Roth IRA?



Yes, the Roth 401k rollover funds become qualified as soon as they are rolled into an already qualified Roth IRA. Client’s entire post rollover Roth IRA balance is therefore qualified and tax free.



Add new comment

Log in or register to post comments