With the end of year approaching, I'm mulling over a couple options and was hoping I might get some advice.
Background
Early 50s. My spouse and I each have a rollover tIRA from a former employer - both are pretax funds. Both are at the same provider. Current combined income is too high to do direct Roth IRA contributions - only option would be a backdoor roth.
I also have a 401k with my current employer (different provider). That plan allows rollovers of funds from other plans. It also allows the ability to do in-plan mega backdoor roth conversions which I've been taking advantage of over the last three years. Plan investment options include a predefined set of MFs, as well as a separate brokerage investment option giving access to a plethora of stock, MFs, ETFs. All is invested in broad based stock/bond index funds.
Not to complicate things, but I also have an HSA that has grown over time.
Options
1) Roll my tIRA into my 401k and be done with it. It would simplify things a bit so that I could take advantage of backdoor roths in the future if funds allow.
2) Backdoor a nominal amount from my existing tIRA ($1K?) to create a Roth IRA and get the 5 year clock ticking, and then roll the remainder of my tIRA into my 401k plan. This is what I'm leaning towards, but had a couple of Qs.
Questions
1) If I already have a Roth 401k that's been funded over the last 3 years, is there much value add in having a separate Roth IRA?
2) In theory, could I not also roll over the Roth IRA into my Roth 401k? (I need to confirm)
3) If option 2 is possible, is there any downsides of post account consolidation, continuing to do backdoor roth IRAs and then rolling them into my Roth 401k?
The only downside I could see is if my employer decides to switch 401k providers and plan flexibility becomes more restrictive.
Background
Early 50s. My spouse and I each have a rollover tIRA from a former employer - both are pretax funds. Both are at the same provider. Current combined income is too high to do direct Roth IRA contributions - only option would be a backdoor roth.
I also have a 401k with my current employer (different provider). That plan allows rollovers of funds from other plans. It also allows the ability to do in-plan mega backdoor roth conversions which I've been taking advantage of over the last three years. Plan investment options include a predefined set of MFs, as well as a separate brokerage investment option giving access to a plethora of stock, MFs, ETFs. All is invested in broad based stock/bond index funds.
Not to complicate things, but I also have an HSA that has grown over time.
Options
1) Roll my tIRA into my 401k and be done with it. It would simplify things a bit so that I could take advantage of backdoor roths in the future if funds allow.
2) Backdoor a nominal amount from my existing tIRA ($1K?) to create a Roth IRA and get the 5 year clock ticking, and then roll the remainder of my tIRA into my 401k plan. This is what I'm leaning towards, but had a couple of Qs.
Questions
1) If I already have a Roth 401k that's been funded over the last 3 years, is there much value add in having a separate Roth IRA?
2) In theory, could I not also roll over the Roth IRA into my Roth 401k? (I need to confirm)
3) If option 2 is possible, is there any downsides of post account consolidation, continuing to do backdoor roth IRAs and then rolling them into my Roth 401k?
The only downside I could see is if my employer decides to switch 401k providers and plan flexibility becomes more restrictive.
Statistics: Posted by KNMLHD — Sat Dec 07, 2024 6:43 am — Replies 6 — Views 298