I am in my late 20s and am a single filer in US. My current employer and future employer(July '17) both provide Roth 401k plans from the same provider(Fidelity). I am deciding between a)rolling over current Roth 401k into a Roth IRA and b)rolling over to the new employer's Roth 401k. I do not own a traditional or Roth IRA at the moment. My income is about to double, and will put me over the Roth IRA income limits for 2017.
Silly question first, if I roll over existing Roth 401k to Roth IRA, will it allow me to put a full $18k in the new Roth 401k from the new employer?
How will the employer contributions(since IRS mandates it to be pre-tax) be taxed in scenarios a and b? If I roll the employer contributions to a traditional IRA, will I still owe tax on it? What is the best strategy here?
If my employer contributions is less than $5500, can I roll it over to traditional IRA and immediately roll it over to Roth IRA? What are the tax implications?
I have read that Roth IRA contributions can be withdrawn penalty-free and tax-free, does the same apply for Roth 401k?
I am intending to fund my Roth 401k with up to $40k a year until I save for a down payment for a house, with the plan of letting compounding work for me with a larger capital. Then withdraw only my contributions for the down payment. Is there any problem I am overlooking with this approach? Are there any taxes incurred here? EDIT: I meant after tax 401k Contribution as mentioned in http://www.madfientist.com/after-tax-contributions/. Is it only applicable to traditional 401k? Then, it wouldn't be prudent to do so, since I would not be able to withdraw my contributions without penalty? For example,$18k in Roth 401k, 5k employer contribution, and 17k in after tax contribution to traditional 401k.