This question is with regards to someone that is 17 years away from 59.5 years of age and that already has a Roth IRA that was established 5+ years ago.
What are, if any, the differences of making after-tax 401k contributions and then using in-service withdrawals to roll them into the Roth IRA versus utilizing automatic roth rollover to convert those same after-tax contributions to Roth 401k and then in-service withdrawing those roth 401k funds to the Roth IRA?
Any difference in flexibility/access before 59.5 yo? Taxes? Wait times between the after tax conversion to roth 401k and then conversion to roth ira versus after-tax directly to roth ira? The goal being to ultimately have funds in Roth IRA for more expansive investment options and potential emergency/need of funds in the years before 59.5.
Background: have been doing after tax directly to roth ira for a few years. It's always a pain to call up Fidelity and figure it all out. Employer now allows automatic in service rollovers. However, I was under the impression that there's a wait period between roth 401k conversion > roth ira > availability of funds from roth ira for someone under 59.5 even if that roth ira is already older than 5 years but that going direct after-tax > roth ira it was available immediately just like a regular backdoor. I don't believe there's an employer restriction (once being employed for 5 years, which I am).
What are, if any, the differences of making after-tax 401k contributions and then using in-service withdrawals to roll them into the Roth IRA versus utilizing automatic roth rollover to convert those same after-tax contributions to Roth 401k and then in-service withdrawing those roth 401k funds to the Roth IRA?
Any difference in flexibility/access before 59.5 yo? Taxes? Wait times between the after tax conversion to roth 401k and then conversion to roth ira versus after-tax directly to roth ira? The goal being to ultimately have funds in Roth IRA for more expansive investment options and potential emergency/need of funds in the years before 59.5.
Background: have been doing after tax directly to roth ira for a few years. It's always a pain to call up Fidelity and figure it all out. Employer now allows automatic in service rollovers. However, I was under the impression that there's a wait period between roth 401k conversion > roth ira > availability of funds from roth ira for someone under 59.5 even if that roth ira is already older than 5 years but that going direct after-tax > roth ira it was available immediately just like a regular backdoor. I don't believe there's an employer restriction (once being employed for 5 years, which I am).
Statistics: Posted by corp_sharecropper — Sun Feb 04, 2024 8:38 pm — Replies 2 — Views 178
