The 5-Year Rule for Required Minimum Distributions

There is a Roth IRA holding period of five years that determines whether you can take a qualified distribution without being taxed. This is sometimes called the 5-year rule.

If the Roth 401(k) has been held for less than five years but the Roth IRA you’re rolling it into has been held for more than five years, then all of the funds now meet the five year requirement. If the Roth 401(k) has been held for more than five years but the Roth IRA you’re rolling it into has been held for less than five years, then none of the funds will meet the five year requirement.