How to Avoid Required Distributions from a Roth 401(k)

Rolling a Roth 401(k) into a Roth IRA can eliminate required distributions for investors who want their money to continue to grow tax-free.

Question: I have a Roth 401(k) and a Roth IRA and was told that I must take required minimum distributions from the Roth 401(k). Is there any way to avoid that? - K.W., Woodstock, Va.

Answer: Yes, you can roll your Roth 401(k) balance tax-free into a Roth IRA, which does not have required minimum distributions once you turn 70½, as a Roth 401(k) does. You will have to complete the rollover before the year you turn 70½ to avoid an RMD, says Ed Slott, an IRA expert and founder of IRAhelp.com. For example, if you turn 70½ in 2020, you would have to complete the rollover by the end of 2019.

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Eileen Ambrose
Senior Editor, Kiplinger's Personal Finance
Ambrose joined Kiplinger in June 2017 from AARP, where she was a writer and senior money editor for more than three years. Before that, she was a personal finance columnist and reporter at The Baltimore Sun, and a reporter and assistant business editor at The Indianapolis Star. Ambrose has a master's degree in journalism from the Medill School of Journalism at Northwestern University, and a bachelor's degree in art history from Indiana University.