[Priya]

Question: to avoid pro-rata, or any withdrawal of Roth funds when I want to access my current 401k money (will use Rule of 55 at some point), can I transfer just the Roth portion to my existing VG Roth IRA. Is this allowed?

I have an existing Roth IRA and I’m wondering if it’s possible to transfer the Roth portion of my 401k into it.

Are there any specific rules or restrictions I should be aware of when doing this?

Would this type of rollover trigger any tax consequences or penalties?

I would appreciate any advice or experiences others have had with a similar transfer. Thanks!

[Joel]

Not sure what the Pro-rata Rule has to do with this. But if your Roth 401k subaccount is distribution eligible you can certainly roll it over to a Roth IRA.

Also, to take advantage of Rule of 55 you must be working at that employer on or after the year you turn 55.

If the Roth 401k funds are in the same plan, you may need to wait until you leave to rollover to a Roth IRA.

Also make sure your employer’s 401k plan permits partial distributions before 59 1/2, else taking advantage of the Rule of 55 can be very difficult.

[Bill]

This is a question for your 401k administrator. There is no law preventing what you are asking to do, but the plan doesn’t have to offer partial rollover.

It’s “probably” allowed since your plan works for megabackdoor Roth and that’s a similar mechanism, but you’ll have to check with them.

[Author]

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