401K After-tax Contributions to Roth IRA
I rolled over my 401K to a new Roth IRA (after-tax 401K contributions) and an existing Rollover IRA (401K pre-tax contributions and all earnings). I’m trying to figure out when I can take $ out of the Roth IRA without penalty/taxes. I am over 59 1/2. I am confused about the 5 year rule. It seems like my contribution of after-tax $ from my 401K would be exempt from penalty/taxes if the after-tax contribution into the 401K was at least 5 years ago. If that is true, then based on the ordering rules I could take out without penalty up to the original amount of the after-tax 401K contributions to the Roth IRA and any earnings could be deducted without penalty/taxes after 5 years. Do I have this correct?
Permalink Submitted by Alan - IRA critic on Fri, 2019-08-30 01:05
Yes, you can take out the amount of the rollover anytime without tax or penalty. Any earnings generated in your Roth IRA cannot be withdrawn without taxes (but no penalty) unless your Roth IRA has been held 5 years. But if you already had another Roth IRA before this rollover that you have had 5 years, all your Roth IRA accounts including the new rollover are fully qualified and tax free . If this is not your first Roth IRA contribution, please advise the year of your first contribution and I can be more specific.
Permalink Submitted by Paul Eccles on Wed, 2019-09-04 18:34
Thanks for confirming the info. This is my first and most likely only contribution.