THE AGE 55 EXCEPTION AND ROLLOVERS OF ROTH IRAS: TODAY’S SLOTT REPORT MAILBAG

Thursday, May 30, 2024


Question:

Can an individual who is using the age 55 exception to the 10% early distribution penalty roll over a part of a 403(b) account to an IRA and leave a portion in the 403(b) to take penalty-free withdrawals?

Thank you, 

Jamie


Answer:

Hi Jamie,

There is no rule under the tax code that says the age 55 exception can’t still be used after a portion of the account balance has been previously rolled over to an IRA. However, it’s possible the 403(b) plan may have an administrative rule that bars participants from taking partial distributions. You should check with the plan’s administrator to confirm any plan-specific guidelines.


Question:

Can a Roth IRA be rolled into a Roth 401(k)?


Answer:

No. Only pre-tax IRA funds can be rolled over to workplace plans. Roth IRAs can only be rolled over to other Roth IRAs.

By Ian Berger, JD
IRA Analyst
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