I have a Roth balance. What do I need to know before I transfer?
If you have a Roth balance in your employer-sponsored plan (401(k), 403(b), TSP...), congratulations! You have already started saving for retirement in a potentially advantageous way.
About seven in 10 companies offer a Roth 401(k) option that lets employees put in after-tax dollars, which can then grow and be withdrawn tax-free in retirement.
What is a Roth balance? And how is it different from Traditional balance?
Conversely, a traditional balance is generally deducted from your paycheck pre-tax; you usually get a tax deduction on your contribution and pay income tax when you withdraw the money from the account during retirement.
How to roll over your Roth balance?
There is only one rule we need to follow: as your Roth balance is already post-tax, you will only be able to rollover the Roth balance to a Roth IRA, or transfer the Roth balance to another employer plan (401(k), 403(b), TSP...) that accepts a Roth balance.
If you're unsure if your preferred destination accepts Roth, this information is often available in your employee portal. You can always reach out to support@usemanifest.com to put our team of detectives on the case.
Some employer plans don’t accept Roth rollovers. In this situation, we strongly recommend rolling over your Roth balance to a Roth IRA. For more information about IRA accounts, refer to our IRA opening guide.
The frequently asked questions, or FAQs, are intended to be helpful and to get you thinking in a more sophisticated manner about your account transfer and related issues. However, these are not meant for accounting, tax, finance, or legal advice, not intended to be exhaustive, and do not create any relationship or duty on our part to assist your particular situation. We offer no warranties on the accuracy or completeness of the information as there could be developments of any kinds, including, but not limited to, any changes in relevant laws and regulations.