roth 401(k) do have a penalty for early withdrawal--you have to pay "normal
income tax" on the growth from your fund (ex: if you put in 90% and it has
grown by 10%, you'll pay income tax on the 10%). If you with withdraw
after 59.5 you don't have to pay income tax on the growth.
This was a pretty lame article. It explains absolutely nothing about how the
switch works. Thanks for the worthless article. I read it thinking I would
learn something, but nope...
roth 401K you can withdraw your contribution amount without penalty at any age.
If you withdraw enough that you hit the gains, you pay a 10% penalty on that
portion which is gain, plus income tax on it. After the day when you turn 59
1/2, literally - not just the year in which it happens... those two items go
away and it's all tax free withdrawal - contribution and gain. That's
different than the 70 1/2 rule on IRA's where you must start taking
distributions - that is the end of the year in which you reach the age - BIG