Understanding the Tricky Roth 401(k) Distribution Rules

The Power Of Zero Show

David McKnight explains how a lack of knowledge about Roth 401(k) distribution rules can lead to unexpected taxes and penalties.

This episode dives into practical insights to help you steer clear of unwelcome surprises from the IRS.

David illustrates what happens if you withdraw from your Roth 401(k) before age 59½, and how these rules differ from those of a traditional Roth IRA.

He subsequently tackles the question of when post-59½ withdrawals of Roth 401(k) growth can be completely tax-free.

Roth 401(k) distributions can be confusing – especially if you’re planning to take funds before age 59½. And there’s an alternative you should consider.

Planning to use your Roth 401(k) as an emergency fund? “Think again!,” says David. He goes over why this may not be the best choice (and what to do instead).

Mentioned in this episode:

David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track

David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code

DavidMcKnight.com

DavidMcKnightBooks.com

PowerOfZero.com (free 3-part video series)

@mcknightandco on Twitter

@davidcmcknight on Instagram

David McKnight on YouTube

Get David's Tax-free Tool Kit at taxfreetoolkit.com