Withdrawing from Roth 401k

If the rules for the Roth 401k are the same as for the Roth, you have until 6 months after April 15th 2011 to withdraw. This is called recharacterizing. No penalty.

What do you mean? The rules for a Roth 401(k) are different than a Roth IRA. There's no free withdrawal of contributions.

Brian

I'm assuming that

correct.

Thanks.

It's not quite the way they indicate. The IRS lays out the rules here:

It's not at all like a Roth IRA.

Brian

2956,00.html#24 actuallyconfirms that unqualified distributions of the principal may be donepenalty and tax-free after 5 years, as Wikipedia stated. Or am Imissing something?

TIA

My reading of it is that, unlike a Roth IRA, distributions are not "contributions first" but rather, more somewhat similar to Roth conversions, prorated.

For example:

Roth IRA - contribute $5000. It grows to $6000. You may now withdraw $5000 with zero tax or penalty consequences. If you take $5500, $500 of it will, if not qualified, be taxed and penalized.

Roth 401(k) - contriubte $5000. It grows to $6000. Now if you take an unqualified distribution of any size, 5/6 of it is untaxed and no penalties, but 1/6 of it will be taxed and penalized. To return to the above example, if you now take a $5000 distribution, you don't get your $5000 contribution back but rather, you get $4166.67 tax/penalty free and you will pay taxes and penalties on $833.33.

I sincerely hope someone will clarify for me wether this is or is not the case.

And if it is the case, why wouldn't one just roll the money over to their Roth IRA and then take the distributions under those rules? (Assuming he or she has had a qualifying event which allows the rollover, such as leaving that employer).