In service rollover to a ROTH IRA
I have a client that has a current Roth 401K and qualifies for an in service rollover. In addition she has two annuities that are IRA’s too. How does the in service rollover to a ROTH IRA affects the tax free distribution at retirement? She is planning to work for 2 1/2 more years.
Permalink Submitted by Alan - IRA critic on Tue, 2018-04-10 00:39
The Roth 401k balance eligible for distribution can be rolled as a direct rollover to a Roth IRA. This has no effect on non Roth IRAs she owns. Once in the Roth IRA, she must update her Roth IRA accounting unless her Roth IRA is already qualified due to her being 59.5 and making her first Roth IRA contribution prior to 2014. In that case her entire Roth is qualified and tax free.