Roth 401(k) to Roth IRA
Christine has had funded a Roth 401(k) for well over five years, but has never had a Roth IRA. When she moves the 401(k) money into a new Roth IRA, do her years with the Roth 401(k) satisfy the five-year rule for the Roth IRA, or does that five years start over?
Permalink Submitted by Alan - IRA critic on Mon, 2021-08-09 21:24
The 5 year holding period starts over for the Roth IRA. However, the portion of the Roth 401k rollover attributed to contributions (not earnings) will be treated as regular Roth IRA contributions which are available tax and penalty free anytime. The 1099R for the direct rollover should show the amount of contributions in Box 5.