@dmertz
Let's say that more than five years ago, I contributed before and after-tax money to my 401-K plan. At the time, my after-tax money wasn't called a Roth 401-K, it was simply after-tax contributions to my company's 401-K plan. I was never clear on what the difference was. The total for all contributions was somewhere in the $60K range annually. Since my company allows in-service distributions, about once a quarter I rolled the after-tax money into a self-directed Roth IRA and the earnings on the after-tax contributions into a before-tax IRA. So the Roth IRA has been open for somewhere around seven years.
Since I started making after-tax contributions, I've been rolling over them into my Roth IRA several times a year. Then in 2024, my employer offered the Roth 401-K option, still allowing after-tax contributions that total somewhere around $70K. For this seven year period, I've been consistently moving money to the self-directed Roth.
I assumed that since I've had that Roth IRA open in excess of five years, anything I take out will not be taxed. If I understand you correctly, the money that has been in the account for less than five years could be taxed. Does the brokerage holding my Roth IRA do a First In, First Out on my distributions? Or is it up to me to keep track.
I'm not taking distributions yet, but I expect to in about one more year.
Thanks for your help.
