Q. Concerning qualified distributions from Roth 401(k) plans ("Give Roth 401(k)s another chance"), are first-time home buyer expenses covered? R.R., via email
A. No. For a Roth IRA, qualified distributions include payments made after reaching age 59½, on account of death or disability or used to pay for first-time homebuyer expenses (lifetime limit of $10,000). But the rule for qualified distributions is limited to payments made after age 59½ or on account of death or disability for Roth 401(k)s. First-time homebuyer expenses aren’t covered.
Tip: The contribution limit in 2012 for a Roth 401(k) is $17,000 ($22,500 if age 50 or older). In contrast, the limit for Roth IRAs is $5,000 ($6,000 if age 50 or older).