CAN YOU ROLL OVER AFTER-TAX MONEY FROM A 401k INTO AN IRA?
-You cannot rollover money from a 401K to an IRA.
An IRA is not the same thing as a Qualified Plan.
A qualified plan is established by an employer to provide retirement benefits for employees and their beneficiaries. Unlike SEP and SIMPLE IRAs. A qualified plan is not IRA- based nor subject to the same rules concerning contributions and distributions.
A business may chose either a Qualified OR an IRA-based plan, but an IRA and a Qualified Plan are not the same thing, and some of the rules affecting them are different..
What’s a rollover?
Rollover means to move money from a qualified retirement plan such as a 401(k), 403b or 457 Plan into an IRA. If you receive a payout from your company-sponsored retirement plan, a rollover IRA could be to your advantage. You will continue to receive the tax-deferred status of your retirement savings and will avoid penalties and taxes.
After December 31, 2006 you can roll over both pre-tax and after-tax contributions from one qualified plan to another qualified plan. The rollover from one qualified plan to another must be a direct rollover and the receiving plan must separately account for the after-tax contributions and earnings.
But keep in mind: an IRA is not a Qualified Plan so you cannot roll over after-tax money from a 401K or other qualified plan into a Rollover IRA
You can roll over all except after-tax money from a 401K or 403B Plan into a Rollover IRA
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2 comments:
החזר מס
I'm sorry, but I think you are wrong. I have been going over the internet the past 3 nights with this question, and you can infact rollover a 401k from a former employer to an IRA. Now if you want to split the after tax money out, that is a little more complicated, but it still can be done.
Just Google "after tax rollover"
Regards,
B
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