Roth IRA 5 Year Rule
Does establishing a Roth 401k start the 5 year clock ticking with regard to qualified withdrawals? For example if I established a Roth 401k in 2010 and then establish a Roth IRA in 2011, can I begin taking qualfied distributions from the Roth IRA beginning in 2015 or 2016?
Permalink Submitted by Alan Spross on Wed, 2011-04-13 19:48
The Roth 401k holding period does not change the IRA holding period. If a non qualified Roth 401k is rolled to a Roth IRA, the IRA holding period trumps any holding period from the Roth 401k. But if the Roth 401k itself is qualified (5 years and age 59.5), when it is transferred to a Roth IRA, it becomes part of the regular contribution balance of the Roth IRA meaning that it can be distributed tax and penalty free at anytime.
As to your specific question, the Roth 401k contributions do not affect the Roth IRA holding period, and the Roth IRA holding period of 5 years ends 1/1/2016.