The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: 401K directed rollover to Roth IRA question||Date: 1/31/2000 1:06 AM|
|Author: mattpam||Number: 18495 of 77393|
TMFPixy's answer to the original question is correct.
You cannot convert 401K assets directly to a Roth IRA.
However,you can set up an roll-over IRA with a conventional broker,online or otherwise, and instruct the Custodian of the 401K plan to deposit the 401K assets into the the roll/over IRA. This is a non-taxable transaction and no taxes are generated
until withdrawals from the IRA commence. You then have the option to roll-over IRA assets into a Roth account.
The transferred assets are then taxable at ordinary income rates in the year of the transfer. To minimize
tax impact, you could make partial transfers, spread
over several years to optimise your taxes.
Hope this helps you choose the best deal! - - Matthew
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|