401k Calculator & Guide
Understand when you can take money from a Roth 401(k), what makes a distribution qualified, how the 5-year rule works, what can happen with early withdrawals and how Roth 401(k) rollovers and RMDs work.
A Roth 401(k) does not mean every withdrawal is automatically tax-free. The tax treatment depends on whether the distribution meets the rules for a qualified distribution.
Your plan determines when distributions can be made. Common events can include separation from employment, reaching an applicable age, disability, death or certain hardship situations.
A qualified Roth distribution is generally excluded from gross income. A nonqualified distribution can include a taxable earnings portion.
Federal rules establish the framework, but your plan document and Summary Plan Description determine which permitted distributions your specific plan actually offers.
Reaching age 59½ does not by itself make every Roth 401(k) distribution qualified. The applicable five-taxable-year requirement generally must also be satisfied.
The IRS generally requires the distribution to occur after the applicable five-taxable-year period and because of a qualifying event.
A qualified distribution from a designated Roth account is generally excluded from gross income.
The five-year period is based on the tax year in which you first made a designated Roth contribution to the applicable plan.
The five-taxable-year period begins on the first day of the taxable year for which you first made a designated Roth contribution to the plan.
Five consecutive taxable years are counted. The period does not simply mean waiting five full calendar years from the date of a particular paycheck.
Once the applicable five-taxable-year period has been met, a distribution can generally be qualified when made after age 59½, because of disability, or after death.
The IRS has special rules for determining the five-year period when a designated Roth account is directly rolled from another employer plan. Keep records of the first Roth contribution year and rollover information.
An early withdrawal can be more complicated than simply paying tax on the entire amount. Designated Roth distributions are generally allocated pro rata between contributions and earnings.
You receive a distribution that does not meet the qualified distribution requirements.
The distribution is generally treated as containing a proportional share of contributions and earnings.
The earnings portion of a nonqualified distribution is generally included in gross income.
A 10% additional tax may apply to the taxable portion of an early distribution unless an exception applies.
The 10% additional tax has exceptions under federal law, and plan distribution rules also vary. Situations involving disability, death, certain substantially equal periodic payments and other exceptions can receive different treatment.
Check the specific distribution circumstances before taking money from a retirement plan.
Separation from employment can be a distributable event, but whether you should take cash, leave the money in the plan, or roll it over is a separate decision.
If permitted by the plan, you may be able to leave your retirement savings where they are instead of taking a taxable distribution.
Eligible Roth 401(k) funds may be directly rolled to another designated Roth account or to a Roth IRA, subject to rollover rules.
Taking money as cash can have tax consequences if the distribution is nonqualified, and may also trigger the additional tax rules for early distributions.
A rollover can preserve the retirement assets rather than treating the distribution as cash. The destination matters.
A direct rollover can move designated Roth assets to a Roth IRA. Roth IRA distribution rules then apply to the Roth IRA.
Learn about Roth IRA rollovers →A direct rollover can generally move designated Roth assets to another employer's designated Roth account if the receiving plan accepts the rollover.
Direct rollover guide →A cash distribution is different from a direct rollover and can create taxable income when the distribution is not qualified.
Learn about rollover taxes →The IRS requires plan administrators to track designated Roth contributions and the applicable five-taxable-year period. Rollover documentation can therefore be important when accounts move between plans.
Under current federal rules, the original owner of a designated Roth account in a 401(k) generally does not have to take lifetime required minimum distributions while alive.
Designated Roth accounts in 401(k) plans are generally exempt from lifetime RMDs for the original account owner while alive.
RMD rules can apply after the death of the original owner. Beneficiary distribution rules depend on the beneficiary and applicable federal rules.
Retirement distribution and beneficiary rules can change. Check current IRS guidance when planning a distribution.
Enter your age and the number of taxable years since your first Roth 401(k) contribution. This simple educational checker does not determine whether your actual plan permits a distribution.
The example satisfies the basic age and five-year conditions. Your actual plan terms and circumstances still matter.
Roth 401(k) rules are not identical to Roth IRA rules. Do not automatically apply the Roth IRA first-home exception to a designated Roth 401(k) account.
A distribution attributable to disability can satisfy the qualifying-event requirement for a designated Roth account, subject to the applicable five-year rule.
If a plan permits hardship distributions, a hardship withdrawal from a designated Roth account can be nonqualified and may contain taxable earnings.
A plan termination can create distribution opportunities, but the tax treatment still depends on whether the Roth distribution is qualified or rolled over.
A direct rollover can generally avoid treating an eligible distribution as cash received by you, subject to rollover rules.
A plan may permit loans from a designated Roth account. Loan availability, limits and repayment requirements are determined under applicable rules and the plan.
Use these questions before requesting a distribution from your plan.
Check the Summary Plan Description or contact the plan administrator.
Determine the first taxable year of your applicable designated Roth contribution.
Check whether age, disability or death satisfies the qualifying-event requirement.
A nonqualified distribution can contain taxable earnings.
Review the early-distribution rules and applicable exceptions.
Compare a direct rollover with taking the distribution as cash.
Explore Roth tax benefits, contribution rules, employer matching and retirement calculators to build the full picture.
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