Does rolling a Roth 401(k) into a Roth IRA restart the five-year clock?

By Kaz · Published 28 September 2026 · How this site checks figures

Summary

Yes. The years the money spent in the Roth 401(k) don't count toward the Roth IRA's five-year period, unless you have contributed to a Roth IRA in an earlier year. In that case the Roth IRA's five years run from that first contribution, and if it was more than five years ago and you're over 59½, the rolled-over money can come out tax-free right away.

Two accounts, two clocks

A withdrawal from a Roth 401(k) is tax-free as a qualified distribution when it comes after a five-taxable-year period and you've reached 59½, died, or become disabled. The plan's five years start on the first day of the tax year you first made Roth contributions to that plan, and end when five consecutive tax years have passed. Someone who first put Roth money into the plan in 2022 finishes the period at the end of 2026.

A Roth IRA runs its own five-year clock, keyed to the first year a contribution went into any Roth IRA, and adds a first-time home purchase to the list of qualifying events.

Where the years go, depending on where the money goes

Where the Roth 401(k) money goes	What happens to the years already in the plan
Roth IRA	They don't count toward the Roth IRA's five years
Roth account in another plan, by direct rollover	They carry over. The new plan counts from your first Roth contribution year in the old plan, if earlier
Roth account in another plan, by 60-day rollover of the taxable part	They don't carry over

The IRS FAQ is specific on the first row: "the period that the rolled-over funds were in the designated Roth account does not count toward the 5-taxable-year period for determining qualified distributions from the Roth IRA."

Why an old Roth IRA helps

The same FAQ adds: "if you had contributed to any Roth IRA in a prior year, the 5-taxable-year period for determining qualified distributions from a Roth IRA is measured from the earlier contribution."

For example, take two 60-year-olds rolling Roth 401(k) balances into Roth IRAs in 2026. One put a small contribution into a Roth IRA back in 2019. Her five years are already done and she's past 59½, so withdrawals of the rolled-over money are qualified from the start. The other has never had a Roth IRA. The years his money sat in the Roth 401(k) don't help him, and his Roth IRA's five-year status depends on the Roth IRA alone.

What a nonqualified withdrawal costs in the plan

Pull money out of a Roth 401(k) before the five years are up and each withdrawal comes out in the same mix of contributions and earnings as the account holds. In an account that is 94% contributions, 94% of the withdrawal is tax-free and the other 6% is taxable earnings; the IRS works through that split in its designated Roth account FAQs. The same split of contributions and earnings decides the tax when a Roth 401(k) check is paid to you before a rollover, covered in which part of a Roth rollover gets taxed.

Sources

Written by Kaz, an independent publisher.
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