Can I Get to My Roth Money If I Need It?
- John Piershale, CFP®, AEP®
- Aug 1
- 3 min read
"I heard Roth money is tax-free — so I can just take it out whenever I want, right?"
Not quite. This is one of the most common misconceptions I hear, especially from clients juggling Roth 401(k)s, Roth IRAs, and after-tax rollovers (sometimes called the “Mega Backdoor Roth”). The truth is: not all Roth dollars are created equal - and access depends on both IRS rules and your employer’s retirement plan.
Let’s walk through what you can really do - and when.
Your employer’s plan has the first say
Even if your 401(k) contributions are labeled “Roth” or “after-tax,” that money is still locked inside your employer’s plan. You may not be able to touch it unless one of these happens:
You leave the employer
You turn age 59½ (and your plan allows in-service withdrawals)
You qualify for a hardship withdrawal or take a plan loan
Your plan allows in-service rollovers of after-tax dollars
So while the account balance might feel like yours, it’s not a free-for-all. The plan document governs when you can access it - not just the IRS.
Roth IRA dollars are more flexible
Once you roll Roth 401(k) or after-tax money into a Roth IRA, you play by IRS rules - and they’re a little different to navigate:
Your contributions: Always available, tax- and penalty-free
Converted amounts: Tax-free after the 5-year rule (starts over with each conversion)
Earnings: Tax- and penalty-free only if you’re 59½ and it’s been 5 years since your first Roth IRA was opened
5-Star Tip: Roth IRAs are the only retirement account where your contributions come out first. If you withdraw $20,000 and you've contributed at least that much over time, there’s zero tax or penalty even if you're under 59½. (Just don’t touch the earnings too soon). Be sure to discuss this with your tax advisor first!
The Mega Backdoor Roth adds another layer
Some plans let you make after-tax contributions above the standard IRS limit and then convert that money to Roth - either inside the plan or by rolling to a Roth IRA.
It’s a great savings strategy, especially for high earners. But here’s the catch:Until you move that money out of the plan, it’s still subject to employer rules. Just because it's Roth doesn't mean it's reachable.
Think of it like hotel room service: you technically own the mini bar snack once you open it - but you’ll still get charged if you take it before checkout.
Why this matters for retirees and pre-retirees
Many folks nearing retirement want flexibility. You might plan to leave your job, downsize, or create a tax-efficient income stream — but those plans can backfire if you assume your Roth funds are always available.
As a fee-only fiduciary, my job is to help you avoid surprises like this. We walk through your plan’s fine print (yes, the Summary Plan Description - the “SPD” no one reads) and map out your options before you make a move.
Know your access rules before you need the money
If you’re making Roth contributions - whether inside a 401(k), through after-tax rollovers, or into a Roth IRA - make sure you understand what you can access and when. A little planning now can save you a big headache later.
Let’s untangle your Roth strategy
Schedule a no-cost 30-minute discovery call to see if we’re a good fit to work together. I’ll share how I help clients navigate decisions like this - and if it makes sense to move forward, we’ll talk about next steps.
John Piershale, CFP®, AEP®
Fee-Only and Fiduciary Advisor
John Piershale Wealth Management, LLC is an Investment Adviser registered with the State of IL and in other jurisdictions where exempt from registration. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy or the completeness of any description of securities, markets or developments mentioned. The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.
