401k->IRA->72t (SEPP) vs. Roth IRA

[ronocnikral]

Since you can roll over a regular 401 to an IRA, I would think you can roll over a ROTH 401 to a ROTH IRA and then you do not have the issue you speak....

i'd rather take a beating than attempt to interpret the IRS' website.

but, here are my learnings....

*you need 5 consecutive years of ROTH contributions into the plan, or you seem to run into trouble.
*you can then roll over to another plan's ROTH account (not sure why one would do that) or an IRA account
*when you roll over, you have to take both the contributions and earnings pro rationed?

Retirement Plans FAQs on Designated Roth Accounts

it's confusing (for me) and early!! maybe we can get this solved opposed to speculating. I am encouraged that ROTH 401k contributions is good for the young dreamer....

 

[Texas Proud]

i'd rather take a beating than attempt to interpret the IRS' website.

but, here are my learnings....

*you need 5 consecutive years of ROTH contributions into the plan, or you seem to run into trouble.
*you can then roll over to another plan's ROTH account (not sure why one would do that) or an IRA account
*when you roll over, you have to take both the contributions and earnings pro rationed?

Retirement Plans FAQs on Designated Roth Accounts

it's confusing (for me) and early!! maybe we can get this solved opposed to speculating. I am encouraged that ROTH 401k contributions is good for the young dreamer....

Thanks for the link... here is one Q&A that I found interesting:

Can I contribute the maximum, including catch-up contributions, to both a designated Roth account and a Roth IRA in the same year?
Yes. if you are age 50 or older, you can make a contribution of up to $22,000 in 2011 to your 401(k), 403(b) or governmental 457(b) plan ($16,500 regular and $5,500 catch-up contributions) and $6,000 to a Roth IRA ($5,000 regular and $1,000 catch-up IRA contributions) for a total of $28,000 for 2011.



Sounds like you can put a lot in the plans if you wish...

 

[ronocnikral]

by age 50, i hope to be withdrawing money, not contributing.

further research has indicated that if you roll into roth ira, it's fair game and there are very little restrictions. if you leave in 401k account, you have to take contributions and earnings in proportion. for example, you contributed $10k and you have $10k worth of earnings. you withdraw $5k, you owe taxes on $2.5k (+10% penalty). you can't pick and choose with the roth 401k. while the roth ira you don't owe taxes until you have withdrawn all your contributions.

 

[studbucket]

Thanks for doing the research, that meshed with what I found as well.