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Old 02-18-2010, 05:13 PM
 
784 posts, read 2,516,546 times
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I will be switching to a new company soon, and I want to roll over my ROTH 401K at my old company to my ROTH IRA. I called Fidelity and they said I would have to pay taxes on any capital gains on the ROTH 401K if I do this! The market was good to me last year, so that's a lot of taxes! This is ludicrous, isn't money in a ROTH supposed to grow tax free? Anyway, she told me that the only way I could avoid this would be to keep my ROTH 401K at my old employer until I am 59. I am 23 right now, with 40K+ in my ROTH 401K. Is what she said true? Would I have to keep my 401K at my old employer until I am 59? Are there penalties for that? That is over 35 years from now!
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Old 02-18-2010, 06:00 PM
 
Location: Alaska
5,356 posts, read 16,344,123 times
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I don't think she knows whar she's talking about:

Rollovers from Roth 401k or 403b Accounts
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Old 02-18-2010, 07:25 PM
 
Location: WA
5,394 posts, read 21,390,738 times
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Quote:
Originally Posted by akck View Post
I don't think she knows whar she's talking about:

Rollovers from Roth 401k or 403b Accounts
I agree, you got bum advice or there was a misunderstanding.

Only if you are going from a non-roth 401 to a roth IRA would there be an immediate tax liability.

I have rolled from 401 to IRA numerous times using Fidelity without problem.
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Old 02-19-2010, 01:04 PM
 
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Yes, I'd call Fidelity again and ask to speak to someone higher up, a supervisor, and speak to them.
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Old 02-19-2010, 06:28 PM
 
Location: Tampa, FL
27,798 posts, read 26,205,335 times
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Sounds like she may have thought you meant 401k to Roth Conversion - but you don't pay for capital gains, but you do pay for the whole lump sum as income. If not a 401k to Roth, then something doesn't sound right.

If you don't convert to Roth, you should be able to move to a regular IRA - just make sure you do it within 60 days - recommend you do a direct financial institution transfer. Don't have a check sent to you directly.
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Old 02-20-2010, 05:13 PM
 
Location: Tampa, FL
27,798 posts, read 26,205,335 times
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I'm mistaken, there is such as thing as a Roth 401k. My mistake.
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Old 07-17-2013, 02:01 AM
 
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i am recieveing around 90,000 from my husbands 401k due to a divorce,i was wanting to put it in a roth IRA and pull about 40,000 to pay of my bills and buy a condo, if i do this will i be taxed on the 40,000. or will it put considered income at the end of the year,
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Old 07-17-2013, 02:05 AM
 
2 posts, read 2,171 times
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Quote:
Originally Posted by Dale12 View Post
i am recieveing around 90,000 from my husbands 401k due to a divorce,i was wanting to put it in a roth IRA and pull about 40,000 to pay of my bills and buy a condo, if i do this will i be taxed on the 40,000. or will it put considered income at the end of the year,
i am 56 years old and can't afford to lose that 20% in taxes so i need to know the best way to go and not ne heavily taxed
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Old 07-17-2013, 03:21 AM
 
Location: Central Massachusetts
4,800 posts, read 4,845,678 times
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Quote:
Originally Posted by Dale12 View Post
i am recieveing around 90,000 from my husbands 401k due to a divorce,i was wanting to put it in a roth IRA and pull about 40,000 to pay of my bills and buy a condo, if i do this will i be taxed on the 40,000. or will it put considered income at the end of the year,

You should not do that. If you can find other sources of money use that.

Quote:
Originally Posted by Dale12 View Post
i am 56 years old and can't afford to lose that 20% in taxes so i need to know the best way to go and not ne heavily taxed
Using retirement money before 59 and a half will give you a hefty penalty of 10% on top of the income taxes that will be due. Try to find other sources to buy your condo and pay your bills.
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Old 07-17-2013, 01:50 PM
 
Location: Alaska
5,356 posts, read 16,344,123 times
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Quote:
Originally Posted by Dale12 View Post
i am recieveing around 90,000 from my husbands 401k due to a divorce,i was wanting to put it in a roth IRA and pull about 40,000 to pay of my bills and buy a condo, if i do this will i be taxed on the 40,000. or will it put considered income at the end of the year,
I'd check with your husband's company before rolling it over. First off, is it a Roth 401k? If not, you'll have to roll it over to a traditional IRA and then convert it to a Roth. You'll also owe taxes on the full amount. The reason I suggested talking to the company, is that you can make penalty-free withdrawals from a 401k plan after age 55 and separated from the company. I don't know how a divorce would be handled. You'll still owe taxes on withdrawals if it isn't a Roth.
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