Roth 401k rollover at retirement

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ROIGuy
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Roth 401k rollover at retirement

Post by ROIGuy »

When my DW retires at 65, about 13% of her 401k will be in her Roth 401k. I know I can roll this over into her personal Roth account at that time, but right now on her 401k plan it just shows the total dollar amount invested in the Roth 401k. Will I be able to choose which funds, this money comes from when I transfer it over?
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firebirdparts
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Re: Roth 401k rollover at retirement

Post by firebirdparts »

It actually wouldn't make any difference. You can trade funds all you want with no consequences inside the box.

Who's the financial institution?
This time is the same
sailaway
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Re: Roth 401k rollover at retirement

Post by sailaway »

Does the web interface allow you to allocate by source?

As mentioned, it doesn't really matter, because you can buy and sell in both accounts without any tax consequences.
wolf359
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Re: Roth 401k rollover at retirement

Post by wolf359 »

When I attempted to conduct a roll-over from an old 401-k to an IRA, I was able to have the option of keeping all investments intact, and roll it over "in-kind." The problem with this is that I was required to get a "medallion" signature, which I never was able to satisfactorily do.

Finally, I just told them to liquidate and send everything over as a dollar amount. I then re-bought everything I wanted once it was in the new account. Because this was in a retirement account, there were no tax consequences for doing so.

Don't sweat it. Just deal with the funds and re-allocate.
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ROIGuy
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Re: Roth 401k rollover at retirement

Post by ROIGuy »

firebirdparts wrote: Tue May 04, 2021 2:13 pm It actually wouldn't make any difference. You can trade funds all you want with no consequences inside the box.

Who's the financial institution?
401k is with Fidelity
Our personal Roth's are with Vanguard
Lionel Hutz
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Re: Roth 401k rollover at retirement

Post by Lionel Hutz »

Mr.BB wrote: Tue May 04, 2021 12:22 pm When my DW retires at 65, about 13% of her 401k will be in her Roth 401k. I know I can roll this over into her personal Roth account at that time, but right now on her 401k plan it just shows the total dollar amount invested in the Roth 401k. Will I be able to choose which funds, this money comes from when I transfer it over?
Your Roth money is already allocated to certain funds/amounts within your 401k. Fidelity tracks this, and there's likely a way to see it yourself though probably not on the main page.
Mr.BB wrote: Tue May 04, 2021 7:42 pm 401k is with Fidelity
Our personal Roth's are with Vanguard
Even if you could choose funds per your first question, it doesn't really matter. Fidelity will liquidate all funds in the 401k and send you/Vanguard a check, during which time you're out of the market. You'll then place those funds into the respective Traditional / Roth IRAs at Vanguard and invest however you choose.

If you’re thinking of it from a perspective of maximizing your capture of gains, Fidelity already has all that tracked and there's no way now to "minimize/maximize" anything. They'll record what is pre-tax, Roth contributions and Roth earnings correctly so that you/Vanguard can notate it accordingly :happy
Last edited by Lionel Hutz on Wed May 05, 2021 12:01 am, edited 1 time in total.
jello_nailer
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Re: Roth 401k rollover at retirement

Post by jello_nailer »

Mr.BB wrote: Tue May 04, 2021 7:42 pm
firebirdparts wrote: Tue May 04, 2021 2:13 pm It actually wouldn't make any difference. You can trade funds all you want with no consequences inside the box.

Who's the financial institution?
401k is with Fidelity
Our personal Roth's are with Vanguard
Timely quote, I just liquidated my Vanguard 401K-Roth (portion) a day or so ago so I can roll into my Schwab R-IRA so all my Roth stuff is together.
Topic Author
ROIGuy
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Re: Roth 401k rollover at retirement

Post by ROIGuy »

I just checked (didn't realize) that I can choose from our 401k plan which fund(s) I want our Roth 401k contributions to go to. We have a U.S. equity index and Intl index funds (via BlackRock) that the plan uses. I guess I should have 100% of the Roth 401k go into those funds.

There is also an option for which funds we want to take the money specifically from for the Roth Rollover when it's time.
Tom_T
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Re: Roth 401k rollover at retirement

Post by Tom_T »

Mr.BB wrote: Wed May 05, 2021 3:26 pm I just checked (didn't realize) that I can choose from our 401k plan which fund(s) I want our Roth 401k contributions to go to. We have a U.S. equity index and Intl index funds (via BlackRock) that the plan uses. I guess I should have 100% of the Roth 401k go into those funds.

There is also an option for which funds we want to take the money specifically from for the Roth Rollover when it's time.
Sometimes the Fidelity Web site for a company-sponsored plan might not have all the options you expect. For example, my plan has contributions for both regular 401K and Roth 401K. I wanted to withdraw from the Roth (I am over 59.5.) The Fidelity site had no option to pick "Roth" as the source. It would only allow me to specify a total amount, and it would automatically withhold a minimum of 20% in Federal tax. I had to call Fidelity, and they confirmed my experience. Fortunately, they were able to do the withdrawal over the phone with no tax withheld from the contribution portion.

I was surprised at how dated the Fidelity page looked. It might be older design than what a retail investor sees.
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jeffyscott
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Re: Roth 401k rollover at retirement

Post by jeffyscott »

Lionel Hutz wrote: Tue May 04, 2021 8:32 pmEven if you could choose funds per your first question, it doesn't really matter. Fidelity will liquidate all funds in the 401k and send you/Vanguard a check, during which time you're out of the market. You'll then place those funds into the respective Traditional / Roth IRAs at Vanguard and invest however you choose.
It may be possible to do an in-kind rollover to an IRA at Fidelity and then do an in-kind transfer to Vanguard, to avoid being out of the market.

My spouse is half-way through a two-step process like this, not with Fidelity/Vanguard though.

Employer Roth plans are weird, with mine I could see how the balance in each account was allocated and have allocation of contributions be different for the Roth and traditional. But any buy/sell transactions were just by fund, not by account type. So if I wanted to sell $1000 of fund A and 25% of my fund A holding were in Roth, 75% in traditional then the sale would take $750 from traditional and $250 from Roth. There was no way to sell $1000 of fund A only in the Roth.

When doing a partial roll over, it was possible to roll from just the Roth or just the traditional, of course, and I could also pick which funds the money was coming from. I could only do it by getting a check mailed though, but being able to choose the funds allowed me to do a bit at a time and keep at least the stock portion fully invested.
Lionel Hutz
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Re: Roth 401k rollover at retirement

Post by Lionel Hutz »

jeffyscott wrote: Thu May 06, 2021 8:44 am
Lionel Hutz wrote: Tue May 04, 2021 8:32 pmEven if you could choose funds per your first question, it doesn't really matter. Fidelity will liquidate all funds in the 401k and send you/Vanguard a check, during which time you're out of the market. You'll then place those funds into the respective Traditional / Roth IRAs at Vanguard and invest however you choose.
It may be possible to do an in-kind rollover to an IRA at Fidelity and then do an in-kind transfer to Vanguard, to avoid being out of the market. Also true that any given plan could have a more or less flexible setup. Some allow as complex a transaction as you’d like, while others are quite rigid.

My spouse is half-way through a two-step process like this, not with Fidelity/Vanguard though.

Employer Roth plans are weird, with mine I could see how the balance in each account was allocated and have allocation of contributions be different for the Roth and traditional. But any buy/sell transactions were just by fund, not by account type. So if I wanted to sell $1000 of fund A and 25% of my fund A holding were in Roth, 75% in traditional then the sale would take $750 from traditional and $250 from Roth. There was no way to sell $1000 of fund A only in the Roth.

When doing a partial roll over, it was possible to roll from just the Roth or just the traditional, of course, and I could also pick which funds the money was coming from. I could only do it by getting a check mailed though, but being able to choose the funds allowed me to do a bit at a time and keep at least the stock portion fully invested.
Good point, if Fidelity 401k let’s him do an in-kind over to Fidelity Traditional and Roth IRA, he could then do the trustee transfer to Vanguard in-kind.

OP, I’m speaking in generalities but most instances of rollover from 401k to IRA involves liquidating assets. Though again rest assured Fidelity tracks each pocket of money.
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