4

My 401(k) plan, to which I make after-tax contributions, has excellent choices for index funds. I have a plan to get Admiral shares of Vanguard Total US Stock Market (ER of 0.06%), then use the bond fund and international index fund in my 401(k) (ERs of 0.04% and 0.14%) to round out my portfolio. I am trying to optimize my portfolio such that my blended ER is less than 0.1%.

I don't have enough in my IRA to afford Admiral shares ($10k min investment), so I was thinking of moving money from the Roth 401(k) to the Roth IRA to do this. Is this possible? I've only seen rules for moving money from a traditional 401(k) to a Roth IRA (and in that case I wouldn't be able to pull this off), but I think this situation is different since it's after-tax cash in all cases.

1 Answer 1

5

No, the situation is not different, the roll-over rules are the same. It won't be taxable (as opposed to traditional to Roth roll-over), but other than that it's the same.

Whether the 401k allows rolling over or not while you're still employed - you have to check with the plan administrator (ask your payroll/HR for details). Usually, the deferred compensation cannot be rolled over out of the 401k while you're still employed.

3
  • Thanks. From a government (IRS) perspective, though, there is no problem? No age restrictions, etc?
    – Dang Khoa
    Commented Apr 3, 2013 at 19:59
  • 1
    @Dang for rollover - there are some limitations on how many times you can roll over, but no age restrictions
    – littleadv
    Commented Apr 3, 2013 at 20:06
  • I understand that one can take in service distributions and/or rollovers after age 55 while still employed. This usually excludes the employer match and its growth, which they seem to track separately. Commented Apr 3, 2013 at 22:23

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .