Monday, January 9, 2012
Can I move my company funds to a Roth IRA or Roth 401(k)?
A: If your company does not offer a Roth 401(k) plan option, you cannot
use a Roth 401(k). It is that simple. Your 401(k) plan document or summary plan description will state under what conditions you can withdraw from the plan. If you are eligible to take a withdrawal (watch out for adverse consequences), you can convert to a Roth IRA. A hardship withdrawal will not be eligible for conversion to a Roth IRA or for rollover to an IRA. You will, of course, pay income tax on the pretax dollars at the time of the conversion. It is always preferable to pay any income tax due on the conversion with outside money rather than using the IRA funds.