Can You Roll a 401(k) Into a Roth IRA?

Yes, you can roll a 401k into a Roth IRA, but if the money in it is pre-tax, everything you move is added to your taxable income for the year of the rollover. Money already in a Roth 401(k) is different: it can roll into a Roth IRA without tax.

That makes the real question less "can you" and more "should you, and how much at a time". This guide covers the IRS rules as of 2026, what the tax bill looks like, how to move the money without triggering withholding, and the alternatives. It's education, not tax advice, and a rollover decision can involve a large sum, so it's worth getting professional help for your own numbers.

Can you roll a 401(k) into a Roth IRA?

Yes. The IRS rollover chart allows money from a qualified plan, such as a 401(k), to go into a Roth IRA. What changes is the tax treatment, which depends on the type of money in your account.

The rule behind the first row: the IRS says any amount rolled from an employer plan into a Roth IRA is subject to the same rules as converting a traditional IRA to a Roth. In other words, it's a Roth conversion, and the IRS has had no income limit on conversions since 2010.

If you're still weighing the two account types, our comparison of the difference between Roth and traditional IRAs explains the "tax now or later" trade-off. And for where a rollover fits in a bigger plan, see our investing for beginners guide.

How much tax will you owe on the rollover?

The pre-tax amount you roll is taxed as ordinary income in that year, at your marginal rate. A properly completed rollover doesn't trigger the 10% additional tax for early distributions, but the income tax itself can be large.

Example (hypothetical): you have $40,000 of pre-tax money in an old 401(k) and roll it all into a Roth IRA in one year.

• Your taxable income rises by $40,000 for that year.
• If all of it were taxed at a 22% rate, the bill would be about $8,800; in practice part of it may land in a higher bracket.
• The extra income can also affect income-based credits, deductions and, for some people, student loan or health insurance calculations.

Ways people manage the bill:

• Pay the tax from savings outside the account. If you use rollover money to pay the tax, less ends up in the Roth, and if you're under 59½, the amount not rolled over can also face the 10% additional tax.
• Split it over several years. You don't have to move everything at once. Rolling the pre-tax money to a traditional IRA and converting part of it each year can keep you in a lower bracket.
• Plan for estimated tax. A large conversion can mean you need to pay estimated tax or raise withholding to avoid an underpayment penalty.

When can you move money out of a 401(k)?

Usually after you leave the employer; while you're still working, only if the plan allows it. Rollovers need an eligible distribution, and each plan sets its own rules on when it pays one out.

Your options depend on where you stand:

• You've left the job. You can generally roll the balance out to an IRA or a new employer's plan.
• You're still employed. Some plans allow in-service distributions, often only after a certain age; many don't. Check your plan's summary plan description.
• Your plan offers an in-plan Roth rollover. The IRS says 401(k), 403(b) and governmental 457(b) plans that have designated Roth accounts may let you move pre-tax money to the Roth side of the same plan. It's taxed the same way, and it can't be reversed.

How do you roll a 401(k) into a Roth IRA, step by step?

Open a Roth IRA, then ask your 401(k) plan for a direct rollover to it. A direct rollover avoids most of the ways this goes wrong.

1. Open the receiving Roth IRA. If you don't have one, our guide on how to open a brokerage account walks through choosing a provider and the application.
2. Find out what's in your 401(k). Ask the plan for a breakdown of pre-tax, Roth and after-tax money.
3. Request a direct rollover. The plan sends the money straight to your Roth IRA provider, or issues a check payable to the provider. The IRS says no tax is withheld on a direct rollover.
4. Decide how to pay the tax. Set aside cash, adjust withholding or make an estimated payment.
5. Invest the money. Rolled-over money often arrives as cash and earns little until you choose investments, which can fall as well as rise.
6. Keep the paperwork. You'll receive Form 1099-R from the plan. Report the rollover on your return for that year.

Why avoid a check paid to you?

If the plan pays the money to you, the IRS says it must withhold 20%, even if you plan to roll it over. You then have 60 days to deposit the full amount, which means making up the withheld 20% from other money. Whatever you don't redeposit is treated as a distribution: taxable, and possibly subject to the 10% additional tax if you're under 59½.

What about Roth 401(k) money?

Roth 401(k) money can roll into a Roth IRA without tax, but its five-year history doesn't come with it. This is the detail most people miss.

According to the IRS, the time the money spent in your Roth 401(k) doesn't count toward the Roth IRA's five-year period for qualified distributions. If you contributed to any Roth IRA in an earlier year, though, the five-year period is measured from that earlier contribution.

What that means in practice:

• If you already have an older Roth IRA, rolled-in Roth 401(k) money joins its clock.
• If you don't, the clock starts with the rollover year, even if you've had the Roth 401(k) for a decade. Some people open a small Roth IRA early for this reason.
• Use a direct rollover. If a Roth 401(k) distribution is paid to you, the IRS says the rules for what can be rolled over and where get more restrictive.

Our explainer on the Roth IRA 5-year rule covers how both five-year clocks work.

A note on required distributions: the IRS now says RMD rules don't apply to designated Roth accounts while the owner is alive, so avoiding RMDs is no longer the main reason to move Roth 401(k) money. Wider investment choice and lower fees often are.

Is rolling your 401(k) into a Roth IRA a good idea?

It can be when you can pay the tax from outside savings and expect your tax rate to be the same or higher later; it often isn't when the tax would have to come out of the rollover itself. Nobody knows future tax rates, so treat this as a judgment call.

Points that favour rolling to a Roth:

• A low-income year, such as between jobs, returning to school or early retirement.
• Cash outside the account to cover the tax.
• A long time before you'll need the money.

Points that argue for caution:

• A high tax bracket now that you expect to fall in retirement.
• No cash to pay the tax.
• Plan features you'd lose, such as low-cost institutional funds, or special tax treatment of company stock. Creditor protection can also differ between workplace plans and IRAs, depending on your state.

Be careful with anyone who contacts you about your old 401(k) and pushes a rollover into a specific product, such as a high-fee annuity or a precious-metals IRA. Our guide on how to avoid investment scams explains the red flags.

What are the alternatives to a Roth IRA rollover?

You can usually leave the money where it is, move it to a new employer's plan, roll it to a traditional IRA, or cash it out. Only the last one is usually a bad idea.

One extra point if you earn too much to contribute to a Roth IRA directly: a big pre-tax balance in a traditional IRA can make a backdoor Roth IRA partly taxable, while the same money left in a 401(k) doesn't.

Outside the US the accounts differ, from UK workplace pensions and SIPPs to Canada's RRSP and Australian super, and so do the transfer rules. Check your own government's guidance before moving any pension money.

Next steps

• Build the plan around your accounts with our step-by-step guide to investing for beginners.
• See a common order for filling accounts in how to invest for retirement.
• New to Roth accounts? Start with Roth IRA for beginners.
• Want more income to save in the first place? Explore our guide to making money online.