Hello- I turned 55 this February and retired this June. I have company stock in both before tax 401k and in my Roth portion of 401k. Current price of stock $405, basis is $75. I want to transfer my Roth portion of 401k (all assets not just Co. stock) into my ROTH IRA-which has been open for over 5 years. The remainder of before tax 401k I will need to utilize for living expenses until I turn 59.5 years old. What is the best sequence of these transactions? Company stock in kind transfer to brokerage account, transfer of ROTH portion, or ?
thank you!
Sue333
Your 401k plan trustee should be able to do a direct rollover of your designated Roth 401k funds into your Roth IRA. Just contact both companies and ask them to set it up. It will not affect your pre-tax 401k funds.
You would possibly have the option of transferring the stock itself. Or, you sell the stock in the 401k and transfer the cash to the IRA. Or, you transfer the stock to the IRA and then sell it in the IRA an invest in other things. Buying and selling shares within the Roth account does not create a taxable situation, and it doesn't matter for taxes what order you do it. It will depend more on the rules of the 401k plan and the IRA account.