Roth 401k to Roth IRA question

[caninelover]

Hi everyone,

Question on the 5-year rule related to rolling over a Roth 401k from an employer plan into a Roth IRA after leaving the employer.

I have an existing Roth IRA that has been open for > 5 years. I am no longer eligible to contribute directly to it but have been making contributions to my employer plan Roth 401k. There are also employer matching funds in the 401k that are pre-tax.

When I FIRE I will want to roll over the entire 401k - the pre-tax would go to a traditional IRA and the Roth 401k to a Roth IRA.

My question is - if I roll the Roth 401k over into my existing Roth IRA (which has been open for longer than 5 years) does the 5-year rule apply to the rollover funds, or are they automatically qualified to withdraw contributions (I know I wouldn't be able to withdraw any earnings until 59.5)?

My research seems to indicate that the 5-year rule would not apply but I want to make sure I'm not missing anything...

[zekeboz]

Interested in this also.

[jazz4cash]

I did the same thing and the opening date of the Roth IRA you are rolling into is what matters. In my case the Roth 401k had separately met the 5 yr rule so I could’ve left it there until the Roth IRA hit the 5 yr mark.

[caninelover]

That seems to be aligned with what I found, that the age of the Roth IRA is what matters.

[Whisper66]

I am not an expert but this Schwab article says..... "When you rollover funds from a Roth 401(k) to a Roth IRA, it’s the age of the Roth IRA that sets the clock for the 5-year rule."

https://www.schwab.com/resource-cent...1k-to-roth-ira

[retire48in2018]

In my experience, the finance company will put rollover into a new account - labeled “rollover” and not into same account.

Perhaps, finance companies are different and treat it differently.

Same thing when I rolled money into a company 401k - they kept the rolled in money separately tracked.

[teej1985]

Quote:

Originally Posted by retire48in2018 In my experience, the finance company will put rollover into a new account - labeled “rollover” and not into same account. Perhaps, finance companies are different and treat it differently. Same thing when I rolled money into a company 401k - they kept the rolled in money separately tracked.

When I rolleded over to Vanguard, they created a Rollover IRA for the traditional assets being rolled over, and they put the rolled over Roth assetsi n the existing Roth IRA.

[caninelover]

Quote:

Originally Posted by teej1985 When I rolleded over to Vanguard, they created a Rollover IRA for the traditional assets being rolled over, and they put the rolled over Roth assetsi n the existing Roth IRA.

Thanks, this makes sense. I can inquire with Vanguard and confirm but this also aligns with the age of the existing Roth IRA meeting the 5-year rule.