Is there a limit I can move to the roth for the traditional in a yr?

I have two 401ks that I want to consolidate however I don't want to roll them into my current 401k.

What obstacles am I looking at with rolling them to a traditional and backdooring them to a Roth?

Any tax or penalties?

This post was edited on 1/25/21 at 8:19 pm

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Posted by busbeepbeep

When will then be now?

Member since Jan 2004

18348 posts

Posted on 1/25/21 at 8:36 pm to GREENHEAD22

The limit is still $6000 for a backdoor conversion. No tax or penalties as far as I know. I think there's some timing issues. I had an Edward Jones guy handle it for me so not sure all other details.

This post was edited on 1/25/21 at 8:38 pm

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Posted by EYEDOCNO

New Orleans

Member since Sep 2004

1149 posts

Posted on 1/25/21 at 9:08 pm to GREENHEAD22

If you have existing IRA's, you need to read up on the pro-rata rule. It could cause you to have significant tax consequences.

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Posted by molsusports

Member since Jul 2004

36112 posts

Posted on 1/25/21 at 9:27 pm to busbeepbeep

quote:
limit is still $6000 for a backdoor conversion

There are allowable methods to do more than 6 or 7k per year.

watch out for pro rata penalties and 401k rules

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Posted by LSUFanHouston

NOLA

Member since Jul 2009

37091 posts

Posted on 1/26/21 at 12:54 am to GREENHEAD22

quote:
Questions on Backdoor roth contributions

quote:
I have two 401ks that I want to consolidate however I don't want to roll them into my current 401k

A backdoor Roth involves contributing non-deductible money to a Traditional IRA, and them immediately converting those dollars.

What you are wanting to do is just a plain ole Roth Conversion. You pay ordinary income tax on the amounts you convert. There are no penalties.

Some brokers will allow you to go directly from a 401K to a Roth IRA, without stopping at a Rollover IRA first.

Edit: It's rare, but possible you have after-tax dollars in your 401K, and if you do, you won't pay taxes on the full amount of the conversion. There are pro-rata rules in play.

This post was edited on 1/26/21 at 12:56 am

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