401(k) After-Tax Contributions
I have a client in his 60s that recently retired. His 401(k) with his former employer is broken down as follows:
- 95% pre-tax contributions and earnings on after-tax contributions
- 5% after-tax contributions
I know the after-tax contributions are eligible to be rolled directly into a Roth IRA. Is he able to rollover just the after-tax contributions and leave the pre-tax $ in his 401(k) or is a total rollover required (pre-tax $ rolling into his Traditional IRA and after-tax contributions rolling into his Roth IRA) and the 401(k) must be zeroed out?
Permalink Submitted by Alan - IRA critic on Fri, 2025-04-04 10:49
Some plans may allow participants to roll out only the after tax sub account (contributions and earnings) and leave the pre tax account in place. Others require a total LSD. None will allow just the after tax contributions to be rolled out, except possibly any pre 1987 after tax contributions. Client should check with their plan administrator.