My husband is eligible for a partial payout on money he has contributed toward his retirement. The majority of the money was contributed before taxes and we understand that this can be rolled into a standard IRA which will have RMDs and taxes. A substantial portion was contributed AFTER taxes and we are wondering if this amount can be placed in a Roth IRA since it is coming from a retirement account? Thank you for all your help
My husband is eligible for a partial payout on money he has contributed toward his retirement.
What kind of account is it? Why is it only a partial payout? Why is he eligible for the payout? All of those things can matter when determining whether he can roll out of an employer plan, not to mention the rules of the employer’s plan, not just the laws that the IRS enforces.
The majority of the money was contributed before taxes and we understand that this can be rolled into a standard IRA which will have RMDs and taxes.
Assuming the money is currently in a qualified plan, yes, it should be able to be rolled into a Traditional IRA.
A substantial portion was contributed AFTER taxes and we are wondering if this amount can be placed in a Roth IRA since it is coming from a retirement account?
Possibly, but it can depend on some of the answers to questions above.
Here is a chart from the IRS that helps you determine what type of rollovers can be done https://www.irs.gov/pub/irs-tege/rollover_chart.pdf But keep in mind that the rules of the employer’s plan can be more restrictive than the IRS rules.
AJ
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Thank you. I should have said that my husband is retiring and the distribution is a result of that circumstance. Your link helped me find the answers I needed.