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Minimum time criteria for Roth IRA/401K
Old 05-31-2007, 06:00 PM   #1
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Minimum time criteria for Roth IRA/401K

There is a requirment for 401k Roth withdrawel at 59 1/2 without penalty, that the account must be in existance for 5 years, and obviously you must be over 59 1/2. Ignoring for the moment, the reasons that I would want to withdraw the funds, my question is, if I rollover the Roth 401k after two years to an existing Roth IRA, that only has a few thousand it it, does the account status of the IRA then satisfy the requirement for the 5 years, and can you then, immediately (or almost immediately) withdraw the whole amount without penalty? I am assuming that the Roth 401k would have $40,000 in it, and the existing Roth IRA would have $1000 in it, it that makes a difference.:confused:
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Old 05-31-2007, 07:27 PM   #2
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Quote:
Originally Posted by whitestick View Post
There is a requirment for 401k Roth withdrawel at 59 1/2 without penalty, that the account must be in existance for 5 years, and obviously you must be over 59 1/2. Ignoring for the moment, the reasons that I would want to withdraw the funds, my question is, if I rollover the Roth 401k after two years to an existing Roth IRA, that only has a few thousand it it, does the account status of the IRA then satisfy the requirement for the 5 years, and can you then, immediately (or almost immediately) withdraw the whole amount without penalty? I am assuming that the Roth 401k would have $40,000 in it, and the existing Roth IRA would have $1000 in it, it that makes a difference.:confused:
Found the answer for you by googling "roth 401k site:irs.gov" and clicking on the first link:

"How is the 5-taxable-year period calculated in the case of a rollover of a distribution from a designated Roth account maintained under a section 401(k) or 403(b) plan to a Roth IRA?
In the case of a rollover of a distribution from a designated Roth account maintained under a section 401(k) or 403(b) plan to a Roth IRA, the period that the rolled-over funds were in the designated Roth account does not count towards the 5-taxable-year period for determining qualified distributions from the Roth IRA. However, if an individual had established a Roth IRA in a prior year, the 5-year period for determining qualified distributions from a Roth IRA that began as a result of that earlier Roth IRA contribution applies to any distributions from the Roth IRA (including a distribution of an amount attributable to a rollover contribution from a designated Roth account)."

The way I read that you can do what you describe.


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Old 05-31-2007, 08:45 PM   #3
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Cool! Thanks for finding the link and the answer.
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Old 06-01-2007, 06:00 PM   #4
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You bet!

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