Sarah Brenner, JD
Director of Retirement Education
Question:
Can I roll over a Roth 401(k) to an existing Roth IRA or does it need to be in its own separate account? When does the 5-year holding period begin for the Roth 401K rollover?
Thank you,
Elisabeth
Answer:
Hi Elisabeth,
A Roth 401(k) can be rolled into an existing Roth IRA. The funds do not have to be kept separate. The 5-year holding period for tax-free distributions of earnings will be the existing Roth IRA’s 5-year holding period. This 5-year holding period does not restart with the rollover from the plan.
Question:
Dear IRA Help:
I have already done one 60-day rollover from a qualified plan to my IRA within the last 12 months, and I would like to do another 60 day-rollover from the same qualified plan to the same IRA. My IRA custodian is claiming I am limited to one 60-day rollover per year from a qualified plan to an IRA.
Can I please have a clarification?
Sincerely,
Victor
Answer:
Hi Victor,
Good news! The once-per-year rollover rule to which you are referring does not apply to your situation. This rule limits 60-day rollovers between IRAs. You may only roll over one distribution from all of your IRAs within a 365-day period. However, this rule does not apply to rollovers from plans to IRAs. There is no limit on the number of plan-to-IRA rollovers that can be done within a 365-day period.
https://irahelp.com/slottreport/roth-401k-rollovers-and-the-once-per-year-rollover-rule-todays-slott-report-mailbag/