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URL:  http://boards.fool.com/you-cant-rollover-after-tax-401k-11932954.aspx

Subject:  Re: Elementary, my dear watson Date:  2/5/2000  8:37 AM
Author:  Goofyhoofy Number:  27298 of 121426

{{You can't rollover after-tax 401(k) contributions into an IRA}}

I guess what this means is that the $100,000 in after-tax contributions can't be put into the IRA, but the $400,000 can. However I'm told by the plan administrator (Westinghouse) that the first withdrawals must be the $100,000 after-tax, and only after it is entirely withdrawn can I roll out the other $400,000.

Which means, I guess, that I'm making an "early withdrawal" of the $100,000, since it can't be rolling into a self-directed IRA, and therefore I will pay the early withdrawal penalty as well as interest on the gain?

That seems to effectively "trap" the entire amount in the Westinghouse plan unless I want to take a large hit. It would be one thing to bring the $100k out "in front" of the tax wall, but I think I could get over that. But to pay taxes, penalty, and lose the ongoing tax advantage seems a bit much, at least until I do the math again.

{{If this is not employer plan money, read up on "conduit" IRAs in the FAQ before you consider comingling it with plan money. Tainting conduit IRAs with non-plan money is legal, but it is not generally considered to be a good idea}}

I have not heard this before, either from the Schwab or Dean Witter people. Thanks for the tip. I'll read it later today.

Appreciate the help. I'll be grateful for any other thoughts or comments you might have.

Goofy
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