gailwinters
Recycles dryer sheets
- Joined
- Dec 9, 2009
- Messages
- 122
My DD retired last year. For a number of years, she was able to contribute X $ after tax to a cash fund which paid a fixed rate. This was in addition to and separate from her 401K contributions. Several years ago, the company made some changes and she was no longer able to contribute to the cash fund, but the contributions already there stayed in the fund and continued to draw interest.
When she retired, she had two options: she could withdraw the funds, or it could be rolled into her 401K. The fund balance was about half contributions and half earned interest. She opted for a rollover, and that money is in a separate “bucket” in her 401K. She would like to roll the after tax contributions to her Roth IRA and leave the earned interest in her 401 K, but we’re not sure if that’s allowed under the IRS rules. We’ve read a number of explanations, and it seems that if she does a rollover of the contributions to a Roth, then she would have to do a rollover of the earnings to a Traditional IRA.
Are we missing anything?
When she retired, she had two options: she could withdraw the funds, or it could be rolled into her 401K. The fund balance was about half contributions and half earned interest. She opted for a rollover, and that money is in a separate “bucket” in her 401K. She would like to roll the after tax contributions to her Roth IRA and leave the earned interest in her 401 K, but we’re not sure if that’s allowed under the IRS rules. We’ve read a number of explanations, and it seems that if she does a rollover of the contributions to a Roth, then she would have to do a rollover of the earnings to a Traditional IRA.
Are we missing anything?
