"employees who have a Roth 401(k) will no longer need to take RMDs." Huh?

[Time2]

The statement below is from a Schwab website.

"401(k), 403(b), and similar workplace retirement plans—including Roth 401(k)s if you haven't yet taken your RMDs for 2023 ( Certain qualified plans can allow for those still working to forgo RMDs until their employment is terminated. Starting in 2024, employees who have a Roth 401(k) will no longer need to take RMDs. )"

Have I missed the fact the Roth accounts have had RMDs?

Charles Schwab

Quote is below Do the Math.

 

[Gumby]

Regular Roth IRA accounts never had RMDs, but Roth 401k and 403b accounts did. Now they won't.

Retirement plan and IRA Required Minimum Distributions FAQs | Internal Revenue Service

Find out about required minimum distributions on your retirement plan under Internal Revenue Code sections 401(a)(9), 408(a)(6) and 408(b)(3) and how much and when to withdraw.

www.irs.gov

Ten Differences Between a Roth IRA and a Designated Roth Account | Internal Revenue Service

Top Ten Differences Between a Roth IRA and a Designated Roth Account

www.irs.gov

 

[skyking1]

I think the key here is 'current employees" .
it is a pretty small subset that are still working at 72.

 

[Time2]

Regular Roth IRA accounts never had RMDs, but Roth 401k and 403b accounts did. Now they won't.

Retirement plan and IRA Required Minimum Distributions FAQs | Internal Revenue Service

Find out about required minimum distributions on your retirement plan under Internal Revenue Code sections 401(a)(9), 408(a)(6) and 408(b)(3) and how much and when to withdraw.

www.irs.gov

OK, before the change, was there any tax due or was this just to force money into taxable accounts?
I have never had a 401k of any kind, but my son does. I told him he needs to check on how the company match is made, suspecting it is put in a tax deferred t401k, not the Roth. His company also pays profit sharing into his tax deferred t401k. However on the Vanguard website it is not specifically broken out as a Roth 401k (company plan) and a t401k. If he tries to do a Roth Conversion, then it does show the company match amount and the profit sharing match amount. So, I'm now pretty sure the match is put into a t401k. I just was confused because they don't break out the different accounts and show both. Although another explanation is company sponsored accounts are different.

 

[Gumby]

It never had a Roth401k, nor did I ever get a company match, so all I know is what the IRS says in the cites to my last post. It sounds like you have figured it out properly, but I would rely on someone with more knowledge than me to be certain.

 

[MarieIG]

I contributed to a Roth 401(k) at my last job. There was no match. Had the law not changed my options were to be faced with RMD or roll it into a Roth IRA which did not require the RMD. (IMHO this treatment was not consistent.) In my case, I was not forced to give up a good 401(k) plan, so the decision to roll it into a Roth IRA was not a difficult one.

 

[Time2]

I contributed to a Roth 401(k) at my last job. There was no match. Had the law not changed my options were to be faced with RMD or roll it into a Roth IRA which did not require the RMD. (IMHO this treatment was not consistent.) In my case, I was not forced to give up a good 401(k) plan, so the decision to roll it into a Roth IRA was not a difficult one.

Would that RMD have been taxed, or was that just a way for the government to get the money out of an untaxed account?

 

[MarieIG]

Would that RMD have been taxed, or was that just a way for the government to get the money out of an untaxed account?

It is my understanding that it would not have been taxed at the time of withdrawal.

No deduction was taken at the time of contribution(s).

 

[cathy63]

Would that RMD have been taxed, or was that just a way for the government to get the money out of an untaxed account?

Roth 401(k) RMDs are not taxable. When the law creating Roth 401(k)s was written, they originally had the same RMD requirements as regular 401(k)s. This was more of an oversight than an intentional way to get money out of these accounts. The SECURE 2.0 Act straightened things out and made it clear that Roth 401(k) accounts will not have RMDs in 2024 or later years.