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I'm planning to leave my current employer in four years and attend grad school for several years, and I'm unsure what I should do with the funds in my Roth 401K. Based on my current salary and my employer's contributions, I'll have about $33K in this account when I start school (ignoring gains or losses).

Will I be able to roll my Roth 401K into my existing Roth IRA without complications, e.g. rollover limits, when I become a student? I won't necessarily have any earned income when I'm in school; I think it depends on whether I'm issued a W2 or a 1099MISC for the fellowship income that I'll (hopefully) receive.

My 401K is currently invested in several funds with expense ratios ranging from 0.03 to 0.14, so there are worse options than leaving the money there for several years until I start working again. However, I would prefer to roll it into my Roth IRA and manage it from there. If necessary I'll post the details of my 401K contributions.

John Bensin
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For this rollover, there are no restrictions of age/income/etc.

You need to know - the transfer must be direct, i.e. if you get a physical check, it should be payable not to you, but to the new custodian (broker) for your benefit. Direct is preferable and faster.

The assets may not be transferable 'in kind.' This phrase simply means that you may move the value, but if the assets are not shares that are held by the public, but special 401(k) class shares, they must be liquidated before moving, and moved as cash. This is a risk people with large accounts take should the market move dramatically during the time they are liquidated, and why, for them, I suggest doing it piecemeal.

JoeTaxpayer
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