Actually, it may not be that complicated but I haven't found an answer yet.
I have a Roth IRA I started 13 years ago. I'm old enough to take money out without penalty. I'm good there.
I also have another Roth IRA that I rolled over from a Roth 401k early this year when I changed jobs. I had started the Roth 401k several years ago, but when I rolled it over the timer was reset and according to the company that is holding it I can't withdraw money without penalty until 2020.
Now my current company is going through changes and I may wind up with another roll over situation.
Each of the 3 accounts is with a different company.
Not being able to access the 2nd Roth until 2020 probably isn't an issue, but as I'm coming up on the same scenario again I'm wondering if I should have done things differently. Perhaps instead of rolling over in place I should have rolled the Roth 401k into the older Roth? If I roll the 2nd account over now, will it make that money accessible or does it bring restrictions to the first account?
If anybody happens to have a link to a good site about this stuff, that would be helpful. I have googled and looked through some of the IRS site and haven't seen anything useful. The help line at the 2nd company said that since I'm over 59.5 the 5 year period doesn't apply but I don't think that's true.
Mine was a 403(b) - I am not familiar with a Roth 401(k) or any other, except Roth IRA, which originated for us when that first became a possibility. We paid a huge amount of federal income taxes spread over a four year period at the time. Our roll-over is with the same company, same specific Fund name but the two are identified as "Roth IRA" and "Rollover" so I am not clear what a "roll-over Roth" is, actually. My ignorance.
Thanks for the reply. Sounds like yours was more like a regular 401(k) rollover than a Roth 401(k) rollover. The 403(b) is almost in all ways like the 401(k), except AFAIK there isn't a Roth 403(b). I did a regular 403(b) rollover to a non-Roth IRA a number of years ago, and I didn't have to pay any tax. For Roth 401(k) to Roth IRA rollover there shouldn't be any tax because they're both after-tax money. The only question is when I can take out the money without paying tax on the earnings.
Thank you Sheryl for asking such an educational question. I think you can withdraw from all 3 of your Roth IRAs whenever you want, tax and penalty free. I arrived at this conclusion by reading a blog post at kitces.com, which I found by using Google to search on roth rollover withdrawl rules. Basically, Michael says that once you have owned any Roth IRA for more than 5 years, and met the age requirement, all your Roth IRAs are fair game. But this doesn't include 401K Roth IRAs that have been rolled over. There is a special rule for those. It is a complicated piece of tax law that I'd never read up on before. I would urge you to not combine any of your accounts, although you could move them to a single institution. It's much harder to figure out what the rules are when you combine accounts. Speaking of which - that was a mistake I was planning to make. My plan has changed, thanks to you.
Thanks, Susanna! So glad my question may have helped. I checked out kitces.com, really great info on the rollovers there. Thanks for the tip!
If you are getting ready to roll more accounts, you might consider rolling them into Roth Annuity plans. I have 3 annuities: 2 are traditional IRA's (403b origins) and the other is a Roth Annuity that originated in a Pension. I can withdraw up to 10% of the funds in each Annuity every year, with out penalty. Part of my strategy is to roll over 10% of the traditional Annuities into the Roth Annuity and hopefully lower taxes in the long run.
If you go the annuity route, BE CAREFUL. Not all annuities are created equal. I have indexed annuities, 2 earning 7% /yr and 1 earning 5% /yr.
I am not an accountant, financial planner, tax guru. Just a schmuck who hopes to be comfortable for life.
Thanks for the suggestion, but I have no interest in doing that. I'm not a big fan of annuities anyway, and this money is not intended for income so I wouldn't want to lock it in to something where I had limitation on withdrawals. I have a large chunk of my regular 403(b) money in the "annuity" part of TIAA-CREF mostly as a conservative portion of the portfolio, and that's probably all the annuity I want.
As it happens, too, my recently-acquired company is not changing the retirement management company in 2016 so I don't have to make any decisions on another rollover this year after all.
Found this searching the IRS site. It seems to directly answer your question. As I am not a tax professional, you can make your own interpretation. Here is the URL to the quote below. Hope it helps!
"How is the 5-taxable-year period calculated when I roll over a distribution from a designated Roth account to a Roth IRA?
When you roll over a distribution from a designated Roth account to a Roth IRA, the period that the rolled-over funds were in the designated Roth account does not count toward the 5-taxable-year period for determining qualified distributions from the Roth IRA. However, if you had contributed to any Roth IRA in a prior year, the 5-taxable-year period for determining qualified distributions from a Roth IRA is measured from the earlier contribution. So, if the earlier contribution was made more than 5 years ago and you are over 59 ½ a distribution of amounts attributable to a rollover contribution from a designated Roth account would be a qualified distribution from the Roth IRA."
Thanks. That is the same information Susanna found but it's good to have an IRS link. I hadn't been able to find one on site.
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