May I move my Roth IRA from the current trustee to a Roth IRA at another financial organization?
What is the difference between a Roth IRA-to-Roth IRA rollover and a Roth IRA-to-Roth IRA transfer?
A Roth IRA-to-Roth IRA rollover is when you withdraw all or part of the amounts in your Roth IRA and then reinvest those amounts within 60 days into the same or another Roth IRA as a rollover. You may only rollover one IRA distribution within any 12-month period regardless of the number and type of IRAs that you hold. The 12-month waiting period begins on the date you receive the Roth IRA distribution, not on the date you roll it over into a Roth IRA.
Alternatively, you may move your Roth IRA from one custodian/trustee to a Roth IRA maintained by another custodian/trustee by requesting a direct transfer. Federal law does not limit the number of transfers you may make during any year.
Are there any restrictions on how often a Roth IRA owner may rollover IRA assets?
You may only rollover one IRA distribution within any 12-month period regardless of the number and type of IRAs that you hold. The 12-month waiting period begins on the date you receive the Roth IRA distribution, not on the date you roll it over into a Roth IRA.
Can employer retirement plan assets be rolled over to a Roth IRA?
Eligible rollover distributions consisting of pre-tax and after-tax assets from qualifying employer retirement plans may be rolled over, directly or indirectly, to a Roth IRA, if applicable eligibility requirements are met. Qualifying employer retirement plans include qualified plans (e.g., 401(k) plans or profit sharing plans), governmental 457(b) plans, 403(b) arrangements, and 403(a) arrangements.
What are the tax consequences of a 401(k) plan to Roth IRA rollover?
Amounts rolled over from a 401(k) plan to a Roth IRA (other than amounts distributed from a designated Roth account) are generally treated as taxable distributions from your employer retirement plan (except for amounts representing after-tax employee contributions). If you are under age 59½, the 10 percent early distribution penalty tax does not apply to the amount you rollover,
however, additional distributions taken, including amounts taken to pay taxes, may be subject to the 10 percent early distribution penalty unless you qualify for a penalty exception.
May I rollover my required minimum distribution (RMD) from my existing plan to a Roth IRA?
No, required minimum distributions (RMDs) may not be rolled over to a Roth IRA. However, once your required minimum distribution is withdrawn, you may generally rollover all or a portion of the remaining plan balance.
May I directly rollover the after-tax plan assets in my retirement plan into a Roth IRA and the pretax assets to a Traditional IRA?
Yes, if a single
distribution from an employer plan is directly rolled over to two or more plans (e.g., a Traditional IRA and a Roth IRA), you may select how the pretax amount is allocated among these plans. To make this selection, you must inform the plan administrator of your desired allocation prior to the time of the direct rollovers.
If I have after-tax amounts in my employer plan; may I rollover just the after-tax amounts to a Roth IRA?
No, it is generally not possible to take distribution of just after tax amounts for rollover. If your account balance in your employer plan includes both after-tax and pretax amounts, each distribution you take will generally include a pro rata share of both after-tax and pretax amounts. If you rollover only a portion of a distribution that contains both pre-tax and after-tax amounts, the pretax amounts will be deemed the first dollars rolled over (i.e., if you only roll an amount equal to or less than the value of the pretax portion of the distribution, the entire amount rolled over will be deemed to have come from the pretax portion of the distribution).
May I move Roth 401(k) assets from my 401(k) plan to a Roth IRA?
Yes. You may roll over, either directly or indirectly, eligible distributions consisting of Roth 401(k) or Roth 403(b) assets to your Roth IRA. This rollover is tax-free.
If I roll over my Roth 401(k) assets to a Roth IRA, who is responsible for tracking the taxable and nontaxable amounts of the rollover?
You are solely responsible for tracking the taxable and nontaxable amounts of the assets rolled over. If a nonqualified distribution is rolled over from a Roth 401(k) or Roth 403(b) to a Roth IRA, the nontaxable and taxable rollover amounts must still be tracked. If a qualified distribution from a Roth 401(k) or Roth 403(b) is rolled over, the entire amount of the rollover contribution is considered basis in the Roth IRA and may need to be tracked.
May Roth IRA assets be rolled over to an employer sponsored retirement plan?
No. Distributions from your Roth IRA are not eligible for rollover to an employer sponsored retirement plan.
Are military death payments eligible to be rolled over to a Roth IRA?
Eligible death payments including military death gratuities and SGLI payments, which are death benefits under the Servicemembers' Group Life Insurance Program, may be rolled over, tax-free into a Roth IRA. These rollovers are not subject to any existing rollover or contribution rules. However, these payments, which can be as high as $100,000 for the death gratuity and $400,000 for the insurance payment, must be completed within one year of the date on which the payment is received.