Hello all, thank you for the wonderful knowledge shared on this site. Found bogleheads in 2017 and have been soaking up knowledge ever since. For every 1 thing I learn, I find many more topics that I know nothing about.
Anyway, I am seeking advice on a plan we are constructing for handling my spouse's i401k. Current i401k plan was moved to Ascensus from Vanguard. Of course, I am kicking myself![:oops:]( "D'oh")
for not acting on this before the move but that is water under the bridge at this point.
The plan we are considering is to terminate the i401k plan and rollover the assets to appropriate IRAs (one traditional; one Roth). Then, we will consider converting all or some portion of the traditional IRA to a Roth IRA this year. My income is highly variable but we are expecting this to be a very low income year making the Roth conversion appealing.
Some background: we are within 5 years of an early retirement (will be mid-50s). The amount of income from the business associated with the i401k has been less than $10K in recent years and this is not expected to change. We have a large percent (~2/3rds) of our invested assets in traditional/tax deferred accounts.
Current assets in the i401k plan are about $150K VTSAX in Roth and $150k VTSAX in traditional. We are thinking to move these to VTBLX and make a corresponding change (~$300K) in my 401k from VTBLX to VTSAX to avoid any wild market swings during this process.
I am aware of these threads:
viewtopic.php?t=430063 (on the nuts and bolts of closing an i401k)
viewtopic.php?t=429947&start=1300 (on Vangard's exit from i401ks)
The advantages of the Roth conversion are well known. An ancillary benefit (thought small) is dropping the need to file Form 5500 each year.
We will discuss this with our CPA but would like to see if anyone has any helpful advice here first. Is our plan sounds? Anythings we should consider before moving forward with this?
Anyway, I am seeking advice on a plan we are constructing for handling my spouse's i401k. Current i401k plan was moved to Ascensus from Vanguard. Of course, I am kicking myself
for not acting on this before the move but that is water under the bridge at this point.The plan we are considering is to terminate the i401k plan and rollover the assets to appropriate IRAs (one traditional; one Roth). Then, we will consider converting all or some portion of the traditional IRA to a Roth IRA this year. My income is highly variable but we are expecting this to be a very low income year making the Roth conversion appealing.
Some background: we are within 5 years of an early retirement (will be mid-50s). The amount of income from the business associated with the i401k has been less than $10K in recent years and this is not expected to change. We have a large percent (~2/3rds) of our invested assets in traditional/tax deferred accounts.
Current assets in the i401k plan are about $150K VTSAX in Roth and $150k VTSAX in traditional. We are thinking to move these to VTBLX and make a corresponding change (~$300K) in my 401k from VTBLX to VTSAX to avoid any wild market swings during this process.
I am aware of these threads:
viewtopic.php?t=430063 (on the nuts and bolts of closing an i401k)
viewtopic.php?t=429947&start=1300 (on Vangard's exit from i401ks)
The advantages of the Roth conversion are well known. An ancillary benefit (thought small) is dropping the need to file Form 5500 each year.
We will discuss this with our CPA but would like to see if anyone has any helpful advice here first. Is our plan sounds? Anythings we should consider before moving forward with this?
Statistics: Posted by fireman — Sun Aug 25, 2024 9:09 am — Replies 1 — Views 109