After you switch companies you can roll over your Roth 401k account into a Roth IRA which gives you alot of money to invest which will have tax free growth. Nice thing about rolling over Roth 401k is that you can invest into individual stocks instead of ETF’s only for most employers Roth 401k. My question is after you roll it over, how do they track the principal amount from the roll over? Asking because you can pull out principal amount out of Roth IRA usually for a $50-100 fee, although the growth and gains can’t be touched until you are >59.5 years old. For example, I worked at Company A and contribute the max amount of 18.5k. 4 years later the 401k is worth 100k. I have a Roth IRA already with 50k, if i roll over the 401k into Roth IRA I will have 150k in my Roth IRA. Somehow I havent been able to see the principal amount being tracked after rolling over (I use Fidelity).
Reach out to Fidelity. Then need to resolve this. I did my rollover using a different broker and everything is getting tracked fine including the account start date (for the 5 year mark) and the principal
Following, I'm curious about this too. On a related note, I started doing my mega backdoor Roth directly into a Roth IRA (rather than Roth 410k) because you can withdraw principle first from the IRA (as opposed to proportionate from Roth 401k). But I still have some Roth 401k I was planning to rollover to Roth IRA... hence I have same question as you.
Doesn’t this require you to pay tax on the 401k amount being rolled into the Roth IRA?
Not if you do a Roth 401k. If it’s traditional 401k to Roth IRA then yes. Traditional 401k can be rolled into traditional IRA, and Roth 401k can be rolled into Roth IRA without penalty when you change jobs
Your example will result in two accounts.
I’ve been able to transfer 401k Roth into Roth IRA and just have one Roth IRA account. The 401k Roth then goes to 0 if that counts as the second account.