I know I can make after tax contributions to a 401k and then do an in-plan Roth conversion of that amount which will then ensure that amount grows tax free. Couple of questions:
- Is the converted amount functionally the same as if I had directly made a Roth 401k contribution or is it treated differently?
- Is it possible to roll out the Roth portion from the Fidelity 401k to my standalone Roth at Vanguard?
- Does the 5 year withdrawal restrictions on the amount converted apply?
401k After tax question
Re: 401k After tax question
1- yes
2- depends on plan rules
3- as long as it was converted with no gains, it should be penalty free; the 10% penalty will apply to any amount that was taxed at the time of conversion
2- depends on plan rules
3- as long as it was converted with no gains, it should be penalty free; the 10% penalty will apply to any amount that was taxed at the time of conversion
Re: 401k After tax question
Both. The money is now in Roth 401k and treated as such. However, It might be treated differently in that you might be able to roll it out to Roth IRA. The law allows that. Your plan may not.stocknoob4111 wrote: ↑Fri May 27, 2022 1:34 pm - Is the converted amount functionally the same as if I had directly made a Roth 401k contribution or is it treated differently?
The law allows that. Your play may or may not allow that.- Is it possible to roll out the Roth portion from the Fidelity 401k to my standalone Roth at Vanguard?
Depends. Where do you want to withdraw it from? The Roth 401k or the Roth IRA? Were there any earnings before the conversion? If Roth IRA, what else do you have in Roth IRA and how and when did it get there?- Does the 5 year withdrawal restrictions on the amount converted apply?
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