Related Posts
Anonymous User
Conversation Starter
More Posts
Pro
Pro
THERE'S A WHOLE NOTHER HALF HOUR OF THIS
Anyone going in on VNET?
Conversation Starter
Need 11likes for dm please
Additional Posts in FIRE Financial Independence Retire Early
Decided to payoff my mortgage.
Enthusiast
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
Why don’t you just do a conversion from an IRA to a Roth IRA? You’ll take a tax hit so speak to a tax professional. But yes roll overs from other accounts are allowable to any employers 401k
Yeah I don’t want to do the pro rata tax situation
Also for context am 55 have 2.6M in an IRA and 350k in 401k so trying to look at the conversion scenarios that would ultimately set me up best way for retirement in a tax advantaged way…
Can't speak to EY specifically, but my company 401k allows it. I had non-deductible contributions and traditional contributions in an IRA. I was able to roll the traditional contributions into my 401k and move the non-deductible contributions to my Roth.
If these are all traditional funds though, I'd ask why you think a Roth rollover and paying taxes is a good idea. Mathematically the scenarios should depend entirely on tax rate. Do you think your tax rate will be higher now or in retirement?
I don’t plan to put in a Roth until I retire. Want to get it out of the trad Ira in order to avoid pro rata rule when I retire and do the Roth ladder conversions. if I can get it all into the 401k no pro rata becomes a good way to avoid paying higher taxes when I do the Roth conversions
Converting a 2.6M trad IRA into directly Roth is a massive tax hit. Look up “Roth conversion ladder” - I would roll the trad IRA into the trad 401k (assuming this is allowed by your employer plan) and consider converting a smaller amount to Roth IRA that wouldn’t push you outside of your current tax bracket for the year. That should open it up for you to make backdoor Roth IRA contributions every year without pro rata considerations.
For me, when I log in the fidelity NetBenefits website, there are links to rollover into 401K and you just follow the steps. If the current IRA account is not at Fidelity, you may have to call the other brokerage and tell them you want to transfer out and they will cut you a check. Sometimes they can do a transfer without the check but Vanguard doesn’t (where I had my IRA). It’s simple but a long process via snail mail. If your other account is at Fidelity it’s much simpler.
It’s all in fidelity so that’s easier at least
Hello! Like others have stated, you can go IRA to 401k. From there It depends on if EY allows in plan conversions. I would strongly consider future outlook and tax brackets before doing this though and would strongly consider a laddered approach. Keep in mind RMDs are required on traditional funds as well eventually. Feel free to DM me for questions!
not all companies will allow you to just stay in the plan indefinitely after you retire though.
what's the benefit of moving IRA assets into a 401k? Feel like people want the opposite usually, since IRAs are going to have more freedom of investment and less fees generally? Is the rationale to move trad IRA assets into a 401k so that you can backdoor roth going forward without dealing with pro rata rule?
Yes that is the exact reason- to get it out of the trad IRA and thus be able to not have to deal with pro rata rule.
Subject Expert
You mentioned the pro rata rule. Do you have nondeductible, aka post tax, balances in your traditional IRA? If not you do not have to worry about the pro rata rule. All your Roth conversions, in IRA or 401k, will be taxable.
Does your 401k allow in plan Roth conversions? Most do not.
Are you still a high earner or have you dialed back or retired? How does your tax bracket now compare to your estimated tax bracket after 70? How old are you?
It may or may not be the right time for you to make Roth conversions.