After Tax contribution roll over to Roth IRA or Employer Roth account

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energy2025
Posts: 105
Joined: Tue Mar 20, 2012 9:59 am

After Tax contribution roll over to Roth IRA or Employer Roth account

Post by energy2025 » Mon Sep 11, 2017 8:49 pm

BHs:

I have reached the limit for contribution for the current year for Pretax 401 K, Roth 401 K and After tax. From past couple of years, I have accumulated over $15K in after-tax in MM funds, it shows a gain of $40.

Question-

Does it matter whether the rollover is from after tax contributions to Roth 401 K or Roth IRA account? I understand employer restrictions of choice funds, etc. which will come with Roth 401 K account vs. Roth IRA which I will have access to all the funds managed by provider.

Any other major concerns I need to be aware of?


I have checked with the provider and I am eligible for a rollover.


Regards,
energy2047

ryman554
Posts: 718
Joined: Sun Jan 12, 2014 9:44 pm

Re: After Tax contribution roll over to Roth IRA or Employer Roth account

Post by ryman554 » Tue Sep 12, 2017 8:52 am

energy2025 wrote:
Mon Sep 11, 2017 8:49 pm
BHs:

I have reached the limit for contribution for the current year for Pretax 401 K, Roth 401 K and After tax. From past couple of years, I have accumulated over $15K in after-tax in MM funds, it shows a gain of $40.

Question-

Does it matter whether the rollover is from after tax contributions to Roth 401 K or Roth IRA account? I understand employer restrictions of choice funds, etc. which will come with Roth 401 K account vs. Roth IRA which I will have access to all the funds managed by provider.

Any other major concerns I need to be aware of?


I have checked with the provider and I am eligible for a rollover.


Regards,
energy2047
It's not clear what you are trying to do here.

Contribute after tax to 401(k) and roll it over somewhere? Or roll existing after tax into / out of 401(k)?

Ant7
Posts: 5
Joined: Tue Aug 22, 2017 10:23 am

Re: After Tax contribution roll over to Roth IRA or Employer Roth account

Post by Ant7 » Tue Sep 12, 2017 10:01 am

ryman554 wrote:
Tue Sep 12, 2017 8:52 am
energy2025 wrote:
Mon Sep 11, 2017 8:49 pm
BHs:

I have reached the limit for contribution for the current year for Pretax 401 K, Roth 401 K and After tax. From past couple of years, I have accumulated over $15K in after-tax in MM funds, it shows a gain of $40.

Question-

Does it matter whether the rollover is from after tax contributions to Roth 401 K or Roth IRA account? I understand employer restrictions of choice funds, etc. which will come with Roth 401 K account vs. Roth IRA which I will have access to all the funds managed by provider.

Any other major concerns I need to be aware of?


I have checked with the provider and I am eligible for a rollover.


Regards,
energy2047
It's not clear what you are trying to do here.

Contribute after tax to 401(k) and roll it over somewhere? Or roll existing after tax into / out of 401(k)?
It is quite clear to me. And I am also very interested in the answer as I am in the same boat.

OP is rolling existing after tax contributions + dividends into Roth 401k or Roth IRA.
The question is: Are there any advantages of rolling into Roth IRA vs Roth 401k?

I will chime with my experience:
It took about 8 business days and 45 minutes of my time spent on the phone to rollover my After Tax Contributions and profits to Vanguard Roth IRA/ TIRA.
It seem as if I were to convert to Roth 401k it would take only one day. However I did not see an option to send contributions to 401k Roth and profits to 401k Traditional buckets.

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tfb
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Re: After Tax contribution roll over to Roth IRA or Employer Roth account

Post by tfb » Tue Sep 12, 2017 10:27 am

energy2025 wrote:
Mon Sep 11, 2017 8:49 pm
Does it matter whether the rollover is from after tax contributions to Roth 401 K or Roth IRA account? I understand employer restrictions of choice funds, etc. which will come with Roth 401 K account vs. Roth IRA which I will have access to all the funds managed by provider.

Any other major concerns I need to be aware of?
There are some minor reasons that favor rolling over to a Roth IRA but in all likelihood they don't matter to you. I wrote them up here:

https://thefinancebuff.com/mega-backdoo ... h-ira.html
Harry Sit, taking a break from the forums.

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Earl Lemongrab
Posts: 2470
Joined: Tue Jun 10, 2014 1:14 am

Re: After Tax contribution roll over to Roth IRA or Employer Roth account

Post by Earl Lemongrab » Tue Sep 12, 2017 11:25 am

Generally, rolling to a Roth IRA is the better play due to flexibility (and for people like me the opportunity to generate deposit/transfer bonuses). If you have a lot in earnings (not the case here) then the ability to split the rollover is valuable and not available for the in-plan Roth conversion.

If the Roth 401(k) had some better investments, that might be a reason. Depending on state you might have some better protection in the 401(k).
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

energy2025
Posts: 105
Joined: Tue Mar 20, 2012 9:59 am

Re: After Tax contribution roll over to Roth IRA or Employer Roth account

Post by energy2025 » Wed Sep 13, 2017 8:51 pm

Thanks fellow BHs.

I guess I can leave the gains (roughly $50) in after tax account n only move the principal in Employer Roth 401 K. This should avoid the additional paperwork?

Energy2051

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Earl Lemongrab
Posts: 2470
Joined: Tue Jun 10, 2014 1:14 am

Re: After Tax contribution roll over to Roth IRA or Employer Roth account

Post by Earl Lemongrab » Wed Sep 13, 2017 11:00 pm

energy2025 wrote:
Wed Sep 13, 2017 8:51 pm
Thanks fellow BHs.

I guess I can leave the gains (roughly $50) in after tax account n only move the principal in Employer Roth 401 K. This should avoid the additional paperwork?
No, you have to move the earnings with it. If you wanted to split, you have to go to IRAs.
This week's fortune cookie: "The stock market may be your ticket to success." I sure hope so!

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