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scccc- OP t1_jegcdc4 wrote

Reply to comment by DeluxeXL in Roth 401k Rollover to Roth IRA by scccc-

It is very very close to how much earnings I see on the funds so I think it is my earnings. I’m assuming it’s because it’s a mutual fund that’s why it’s off. Does that mean if I do the rollover, its just going to maintain the tax deferred status and I’m not penalized or need to pay taxes on it immediately? Just as if I were to keep the funds in the 401k, but I’m just moving it’s location?

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DeluxeXL t1_jegcn1f wrote

It is going to maintain exactly the same balance type. Roth to Roth rollover follows a simple rule: Every type of balance keeps its own identity. Roth 401k contributions become Roth IRA contributions. Roth 401k conversions (such as megabackdoor Roth) become Roth IRA conversions. Roth 401k earnings become Roth IRA earnings.

There is no tax now.

There is no tax ever (assuming you only do qualified withdrawals).

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scccc- OP t1_jeggw40 wrote

Thanks. Your answer is very precise and clear, unlike the fidelity description. I understand now

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