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Message
401k Rollover Decision
Posted on 9/28/16 at 1:13 pm
Posted on 9/28/16 at 1:13 pm
So, new job you know the drill.
High income earners who aren't ROTH eligible. Both of us max 401k. Would like to backdoor ROTH as that remains a thing. No IRAs out there besides ROTHs we had before we incomed out.
New 401k with Fidelity doesn't have brokerage link (damn it) and I can recreate a total stock market index, but no international index.
I figure what I'll do is rollover my old 401k(no indexes, high expense ratios) into this one, use my HSA which looks like it will have Vanguard Total International and other accounts to keep my portfolio at the correct weights, either by rebalancing or through new cash from backdoor roths.
Basically, I don't want to rollover into an IRA as that complicates backdoor ROTHs and I don't want to pay taxes now at all. Just will have some changes to keep international exposure up since my 401k will be all US. Wife's 401k has all the indexes so no issues there.
*This will be my first tax year performing the backdoor roth maneuver
Any holes or issues?
High income earners who aren't ROTH eligible. Both of us max 401k. Would like to backdoor ROTH as that remains a thing. No IRAs out there besides ROTHs we had before we incomed out.
New 401k with Fidelity doesn't have brokerage link (damn it) and I can recreate a total stock market index, but no international index.
I figure what I'll do is rollover my old 401k(no indexes, high expense ratios) into this one, use my HSA which looks like it will have Vanguard Total International and other accounts to keep my portfolio at the correct weights, either by rebalancing or through new cash from backdoor roths.
Basically, I don't want to rollover into an IRA as that complicates backdoor ROTHs and I don't want to pay taxes now at all. Just will have some changes to keep international exposure up since my 401k will be all US. Wife's 401k has all the indexes so no issues there.
*This will be my first tax year performing the backdoor roth maneuver
Any holes or issues?
This post was edited on 9/28/16 at 1:23 pm
1
Posted on 9/28/16 at 2:18 pm to Teddy Ruxpin
quote:
Basically, I don't want to rollover into an IRA as that complicates backdoor ROTHs and I don't want to pay taxes now at all. Just will have some changes to keep international exposure up since my 401k will be all US. Wife's 401k has all the indexes so no issues there.
*This will be my first tax year performing the backdoor roth maneuver
Any holes or issues?
my financial adviser told me that I could backdoor a roth if I set up two traditional IRAs. one for backdooring and one for rollovers. i have no idea if this is true, I was planning on investigating it at the end of the year.
Posted on 9/28/16 at 2:23 pm to Hawkeye95
The issue with the Traditional IRA and the back door Roth is the aggregation rules for Roth conversions.
You should roll your assets into the 401(k) and keep a non-deductible IRA open for the conversion process.
You should roll your assets into the 401(k) and keep a non-deductible IRA open for the conversion process.
Posted on 9/28/16 at 2:25 pm to Maderan
quote:
You should roll your assets into the 401(k) and keep a non-deductible IRA open for the conversion process.
right, and if I had known that when I set up by traditional IRA in 1999, I would have done it. But I didn't.
My plan was to roll it over into my 401k, and the financial adviser said I can do this instead. I have yet to investigate to see if she is correct.
Posted on 9/28/16 at 2:41 pm to Hawkeye95
Hmm that seems dubious that having two separate ones open would skirt the taxation repercussions but that sure would be nice if it worked.
I'm going to google it
Eta: I found something that seems a bit unrelated called the "mega backdoor Roth" that may interest y'all (and the first pass through it hurt my brain)
I'm going to google it
Eta: I found something that seems a bit unrelated called the "mega backdoor Roth" that may interest y'all (and the first pass through it hurt my brain)
This post was edited on 9/28/16 at 2:54 pm
Posted on 9/28/16 at 4:59 pm to Teddy Ruxpin
quote:
Hmm that seems dubious that having two separate ones open would skirt the taxation repercussions but that sure would be nice if it worked.
that is why I was going to investigate it.
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