Reply To: Convert T-401K to Roth IRA

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#5119
Alan S.
Participant

While a pre tax 401k balance can be rolled directly to a Roth IRA, it is unlikely that he can take a distribution while still employed and under 59.5. The exception would be if he was able to make after tax non Roth contributions to the plan (called employee contributions) he would normally be allowed to roll those contributions and their earnings out of the plan to a Roth IRA at any age.

If he left the current company, then a direct rollover can be done from the former plan anytime to a Roth IRA. The plan would determine if he could do partial rollovers or was required to take out the entire balance. If required to roll out the entire balance, he would probably roll it to a TIRA account from which he could convert in smaller amounts to control the taxes due on the conversion.