taking contributions from Roth 401K

I understand that contributions can be removed from Roth IRA accounts at anytime without penalty. Does the same apply to contributions for Roth 401k plans?



No. A Roth 401k deferral cannot be withdrawn before 59.5 unless the employee separates from service. If and when a distribution can be made, it comes out pro rated between earnings and contributions. So if a plan balance is 20% higher than the contributions made, each distribution is 20% earnings and 80% contributions. The earnings portion is taxable and subject to penalty assuming the Roth 401k is not yet qualified. Once a Roth 401k is rolled over to a Roth IRA, then the Roth IRA ordering rules take over.



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