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Hi Fishes,
Is S&P planning to open offices?
Today was my first day at my new job (small startup doing data science). But after I had accepted my offer, I had been interviewing with Amazon, not really thinking it’d work out anyway. Didn’t make it past technical screen which is why I’m at this company now. But my recruiter said they’d recycle my resume for other potential roles, and today they emailed me saying they saw my job change on LinkedIn, asked if I’m still considering roles at Amazon. IDK WHAT TO DO 😭
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You have terminology mixed up. There is no such thing as a personal 401k so I assume you are talking about a Roth IRA. Also that is not a backdoor; that's a rollover.
I highly recommend moving the traditional portion of 401k to your new 401k. Move the Roth portion of 401k to your Roth IRA. The reasons being (1) keeps your ability to do a backdoor Roth open and (2) flexibility and investment options that come with a Roth IRA.
I think what you're referring to is a conversion of traditional to Roth. You will pay taxes out of pocket to convert.
Thank you for your clarification. I was confused on all the terms
Taxes would have to be paid out of your own pocket or any payments withheld by the retirement plan would be subject to the 10% early withdrawal penalty.
What do you mean by backdoor? What do you mean person Roth 401k? You seem to be confused about what terms you are using.
Is the 401k traditional or Roth. If Roth I would roll it into a Roth IRA. If traditional, I would probably roll it into new employer plan. Anything you convert from traditional to Roth would be taxable income in the year converted
Withdraw it all and go ape on some crypto - maybe you’ll be able to retire
You can pay your taxes either of the ways you described. On a traditional to Roth rollover, one of the questions you'll have to answer is "what percentage would you like to withhold for income taxes?" You can choose something like 10% or 15% to pre pay the taxes, or you can choose 0% and take a bite out of your refund. (assuming you're getting a refund, of course!)
When I rolled over my 401k (mostly Roth), here's what I did:
1) Request a withdrawal from the 401k provider
2) Wait for my two checks to arrive in the mail (one for the Roth funds, one for the traditional funds)
3) Deposit my Roth check into my Roth IRA and my traditional check into my Traditional IRA. I already had both of those accounts, and it made life simpler that way.
4) Convert my traditional IRA funds to a Roth IRA through my IRA provider. They have top notch customer service, so I wanted them to do the conversion with them rather than the 401k guys.
If you don't want to open a traditional IRA just for transiting, then take both of the checks in step 3 and deposit them into your Roth IRA.