ROLLING AFTER-TAX 401(k) CONTRIBUTIONS TO A
01.Core Concepts
ROTH IRA: EXAMPLE 2 • T he facts are the same as in Example 1, except that Bob chooses to make a direct rollover of $80,000 to a traditional IRA and $20,000 to a Roth IRA. • Bob is permitted to allocate the $80,000 that consists entirely of pretax amounts to the traditional IRA so that the $20,000 rolled over to the Roth IRA consists entirely of after-tax amounts. 401(k) Plan 1. $250,000 Balance 2. $200,000 pretax amount 3. Bob takes distribution of $100,000 ROTH IRA IRA $20,000 after-tax$80,000 pretax