Roth 401k rollover to a Roth IRA
A person begins contributing to a Roth 401k this year and intends to retire next year. At retirement she will be over 59 1/2. She will roll her Roth 401k into her Roth IRA that has existed for 10 years. Will the earnings on the money rolled over from the 401k plan still be subject to the 5 year holding period?
Permalink Submitted by Alan Spross on Wed, 2010-09-08 18:34
No.
When a non qualified Roth 401k balance is rolled to a Roth IRA, the age of the Roth IRA supercedes the age of the Roth 401k. So having held the Roth IRA for over 5 years, the entire Roth 401k rollover becomes qualified because the Roth IRA is already fully qualified.