Can Roth & Standard contributions be commingled? Are there accounting/tax problems with that?
Earlier this year, I began contributing to a Roth 401(K) that my employer offers, and to which I have made previous contributions (pre-tax). However, in viewing my account, the pre-tax (old 401(k) and post-tax (roth 401(k) investments appear to be commingled.
Is this a problem? Would I ever need to “back” out my Roth contributions?
I’ve searched the IRA website to no avail.
Thanks!
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August 14th, 2010 at 12:19 pm
I don’t believe it is possible to co mingle them. You will have to pay taxes on the regular 401 k when you retire and start to draw it out. But you will not pay taxes on the Roth because it is paid with after tax income. Check with your employer, this could be a problem. Good Luck.
August 14th, 2010 at 1:10 pm
When spouse retired the post tax contributions were distributed to us in a lump payment whereas the pre tax contributions were rolled over into a regular IRA that a financial institution administers.
August 14th, 2010 at 2:06 pm
You cannot comingle those accounts because one (traditional) is all pre-tax money and the other (roth) is after tax money. There has to be some breakdown (that maybe you don’t get on your statement) that tells how much is in each.
That almost has to be the case because the traditional will have required minimum distributions once you hit 70 years and the Roth 401 won’t.
August 14th, 2010 at 2:28 pm
I have a 401k with both pre and post contributions. The statements advise you of both and I have taken out just my post tax contribution with no problems in the past.