401k after- tax money vs Roth 401k
Is there any distinction between after-tax money in a 401k and 401k Roth money?
Can they each, easily be rolled into Roth IRAs?
Is there any distinction between after-tax money in a 401k and 401k Roth money?
Can they each, easily be rolled into Roth IRAs?
Permalink Submitted by Alan - IRA critic on Tue, 2022-09-06 18:49
Yes, the tax rules between these two accounts differ considerably. The Roth 401k contribution earnings are Roth earnings and once qualified are not taxable. After tax non Roth contribution earnings will eventually be taxable. These two contribution types also have different restrictions on rollovers before separation from service, with the after tax contributions and their earnings generally being more distributable. After separation, they both can be rolled into a Roth IRA, but any gains on the after tax contributions will be taxable.
Permalink Submitted by Tim Seiders on Wed, 2022-09-07 12:33
Thanks Alan!