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If someone takes an early hardship withdrawal (for college) from their company Roth 401K, and 2 weeks later decides they instead want to use that money to put into a Roth Ira (using the 60 day rollover rule), will that cause a problem?
A CPA said no it won't, nothing would happen, even though technically it is not supposed to be done because a 401 K hardship withdrawal should be used as originally intended. However, if the person changes their mind after getting the money, they won't be penalized.
The particular Roth 401K does not allow early withdrawals or rollovers while employed and under retirement age.
However, the CPA said that if the person calls their Roth IRA company (such as Vanguard or Merrill or Fidelity), and sends the check for the hardship money within 60 days of withdrawal, it will accept the Roth 401K money into the Roth IRA.
Has anyone ever done this or known of any negative consequences, in a situation where the Roth 401K clearly does not allow rollovers to an outside brokerage (Roth IRA or otherwise)?
Reading the IRS rules it says it can't be done if the 401K Roth won't allow it, which is the case here.
However, the CPA says that rule is not ever enforced by the IRS since 401K Roth plans vary and some allow it, some don't.
A CPA said no it won't, nothing would happen, even though technically it is not supposed to be done because a 401 K hardship withdrawal should be used as originally intended. However, if the person changes their mind after getting the money, they won't be penalized.
The particular Roth 401K does not allow early withdrawals or rollovers while employed and under retirement age.
However, the CPA said that if the person calls their Roth IRA company (such as Vanguard or Merrill or Fidelity), and sends the check for the hardship money within 60 days of withdrawal, it will accept the Roth 401K money into the Roth IRA.
Has anyone ever done this or known of any negative consequences, in a situation where the Roth 401K clearly does not allow rollovers to an outside brokerage (Roth IRA or otherwise)?
Reading the IRS rules it says it can't be done if the 401K Roth won't allow it, which is the case here.
However, the CPA says that rule is not ever enforced by the IRS since 401K Roth plans vary and some allow it, some don't.