401K Rollovers

Submitted by MARK CRISP on Fri, 2020-10-30 14:58

Question? I am 43 years old and would like to pull 12K out of my Employer sponsored 401K and roll it into a Roth IRA. Can this be done, and if so, is there a penalty for doing so. Will I be taxed on the 12K if I roll it into a Roth.



Submitted by Alan - IRA critic on Fri, 2020-10-30 20:00

  • Unless you made non Roth after tax contributions, there is a good chance you will not be allowed to take a distribution if you are still working for this employer. Even a CRD appears not eligible for rollover to a Roth IRA. You should ask your plan administrator if any portion of your plan balance is eligible for an in service distribution. A hardship distribution if you qualify cannot be rolled over. If this 401k is from a former employer, you should be able to do a direct rollover to a Roth IRA, but they do not have to allow rollovers to more than one account or partial rollovers. That would force you to into a total lump sum distribution that you could split between different IRA types or to a new employer plan.
  • Rollover of pre tax amounts to a Roth IRA will be taxable, but no penalty applies. If you have a non Roth after tax balance in your plan there would be no tax or penalty.

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