Personal Investments • After Tax 401K : Where to roll over?

The below applies to us:

- DW and DH both max out after tax 401K
- Both have the option for in plan roll over to roth 401K or out of plan rollover to Roth IRA
- Out of plan roll over is free (no fees), but needs a phone call. we roll over the principal and the gains. So this results in some (<$2k) gains each year that are taxable as we make this call only a few times a year
- In plan rollover now is automatic, so we don't need to call and it results in no taxable event as the money is automatically rolled from after tax 401K to Roth 401K without any gains
- While future cannot be predicted - we do not plan on touching this money before we are 60yr of age. So accessing the principal amount in ROth IRA is not a factor we consider
- The investments available in roth 401K and roth IRA are a wash. Low cost funds available which are no different. Brokerage link access available in 401K which we don't use
- Currently both of us are opting for out of plan roth IRA conversion

Question:

- I understand protections for 401K are better vs IRA. is this then the only difference?
- If we dont use all the money, is the Roh 401K treated differently vs Roth IRA wrt inheritance?
- For diversification, should one choose roth 401K roll over while the other choose roth IRA rollover?
- Is the convenience of automatic rollover is the only consideration and hence both should just roll over in plan?
- Is there any difference wrt RMD rules for either of these roth accounts (401K vs IRA in ROth) that we should consider?

Thanks!

Statistics: Posted by sdsu04 — Sat Sep 21, 2024 1:08 pm — Replies 3 — Views 133

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