Schwab: Roth 401(k) Tax-Free

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Roth IRA

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Business & Economics

Do I Owe Taxes When Rolling Over My Roth 401(k) to a Roth IRA? The Advice Seems Conflicting

Summary

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75% Informative

Roth 401(k)s are employer-based retirement plans funded with money you’ve already paid income tax on.

If your employer made pre-tax matching contributions, you would need to roll those funds into a traditional IRA or pay income taxes on them as part of a Roth conversion.

When you retire, all withdrawals will be tax-free long as they’re qualified distributions.

You shouldn’t owe any taxes if you do a direct rollover of a Roth 401(k) into a Roth IRA.

If your account includes any pre-tax money, such as employer matches, you’ll have to pay income tax on those funds.

To clinch all the tax benefits of the Roth account, it must open for at least five years .

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informal

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English

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