Interesting - Roth 401k Distribution to wrong account
 

I did an "in-service" distribution from my Roth 401k to my Roth IRA. It finally posted today and I noticed that the money went to my "regular IRA" instead of my Roth IRA. This is not good because my Roth 401k is after tax and is now moved to a pre-tax account that I will have to eventually pay taxes on (again). So, I called and they are reversing the wire and now I have to do a new transaction.

Now I'm wondering.....what if they did a distribution from my "regular 401k" and posted to my Roth IRA? Would anyone notice? Would I need to correct this mistake (for them) or chuck it up to "they made a mistake that happened to be in my favor".

The taxman will get his one way or the other.

My guess is that "they" would eventually figure it out. And when they did, they'd grab the taxes and assess a 10% penalty.

You're probably right - except I don't think the 10% penalty applies because I am of age to withdraw (over 59 1/2).

As it turns out, my brokerage is returning the wire and my 401k agency must re-send correctly.

Ah, yeah, the 10% is probably not an issue.