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Rolling over old 401k to my current Roth
Posted on 5/15/14 at 7:37 am
Posted on 5/15/14 at 7:37 am
I've got an old 401k with $6500 in it.
I have a current Roth IRA that I max every year, but haven't contributed to yet this year.
Can I roll that old 401k into my Roth as a 2014 contribution, after tax it would almost max me for the year I figure.
Would I have to pay capital gains on the earnings or anything funky like that?
What say ye MT...
I have a current Roth IRA that I max every year, but haven't contributed to yet this year.
Can I roll that old 401k into my Roth as a 2014 contribution, after tax it would almost max me for the year I figure.
Would I have to pay capital gains on the earnings or anything funky like that?
What say ye MT...
2
Posted on 5/15/14 at 8:10 am to jso0003
First you have to see if your specific 401k plan will allow for a rollover Roth conversion, more than likely they will. If they do and you roll it from your 401k to your Roth it will not count as a "contribution" but a rollover and conversion. So the $6500 will be taxed as ordinary income to you.
Posted on 5/15/14 at 8:39 am to Shepherd88
And I will still be able to contribute an additional 5500 this year?
Posted on 5/15/14 at 10:20 am to jso0003
As long as you fall under the maximum income limits and have earned income, yes.
Posted on 5/15/14 at 1:04 pm to jso0003
Forgive me for being stupid about all of this, but why would you want to do this? My employee contributions are going into a 401k. Is this not what I should be doing?
Posted on 5/15/14 at 3:42 pm to AnonymousTiger
I'm going to contribute to the 401k at my new job, but I just want to do something with this old one and I figure any chance to get outside the high fee "sandbox" of a 401k plan is a good opportunity.
Posted on 5/15/14 at 3:48 pm to jso0003
quote:
I'm going to contribute to the 401k at my new job, but I just want to do something with this old one and I figure any chance to get outside the high fee "sandbox" of a 401k plan is a good opportunity.
Don't know that you old employer will allow a direct pre-tax to Roth conversion. You will likely find that you will need to open a traditional IRA for the existing 401k funds to be transferred to, then transfer/convert those funds to an existing Roth IRA or one that you have opened for this purpose.
Posted on 5/16/14 at 4:47 am to tirebiter
Why not just roll it over to a no load 401K like etrade? Why pay taxes now? When you retire, your income will be lower which = to less taxes down the line unless you planning on drawing more then 60K a year.
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