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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76238  
Subject: Re: ROTH 401K Now Offered Date: 11/3/2013 11:29 AM
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Another difference is that your 401k will be subject to mandatory withdrawals - about 3 pct per year I believe - when you become 70.5 years old. The Roth does not have mandatory withdrawals. These have tax consequences - the non-Roth withdrawals are taxed at that time.

Sorry - you need to be more specific than just 'Roth' and '401(k)' when talking about RMDs (Required Minimum Distributions) at 70 1/2, because Roth 401(k)s DO require RMDs.

Roth IRA - no RMD required, no taxes due on withdrawal (assuming all other rules met)
Roth 401(k) - RMD required at 70 1/2, no taxes due on withdrawal (assuming all other rules met)
Traditional IRA - RMD required at 70 1/2, taxed at your marginal rate
Traditional 401(k) - RMD required at 70 1/2, taxed at your marginal rate

Inherited accounts have different RMD rules

Rules for 401(k) RMDs can be found in IRS Pub 575 http://www.irs.gov/pub/irs-pdf/p575.pdf

Rules for IRA RMDs can be found in IRS pub 590 http://www.irs.gov/pub/irs-pdf/p590.pdf

The required amount for RMDs is based on life expectancy tables published in IRS pub 590 with several examples on how to calculate. For many people, the initial RMD would start at about 3.7% of the account balance (increasing from there) but the tables, and maybe the rules, are likely to change between now and when the OP hits 70 1/2

AJ
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