5 year rule with rollover from Roth 401(k)
I have found conflicting information and would like clarification. An individual has a Roth IRA that was setup more than 5 years ago and a Roth 401(k) with his first contribution in 2020. On retirement in 2024, at age 65, can the Roth 401(k) funds be rolled into the Roth IRA without penalty? OR does the rollover need to be postponed until 5 years from the initial contribution to the Roth 401(k)? Thank you!
Permalink Submitted by Alan - IRA critic on Wed, 2024-01-24 19:06
Because the Roth IRA will be qualified, the Roth 401k rolled into the Roth IRA will also become qualified at that time. Therefore, there is no reason to delay the rollover, which will be non taxable.