Hello folks,
I have a question regarding the impact on a Backdoor ROTH IRA in the same year that I am switching employers and moving my existing 401k (both traditional and ROTH) into an IRA.
So here is the situation in more detail -
At my current employer, I max out my pre-tax traditional 401k and also contribution to an after-tax Roth 401k via in-plan conversion that my employer provides via Fidelity. So I have "x" amount in my traditional 401k and "y" amount in my Roth 401k (after-tax). Now, I am changing jobs soon so I need to rollover my existing 401k accounts to their corresponding IRA equivalents and I have now have a traditional IRA with "x" amount and ROTH IRA with "y" amount.
I am also planning on doing a Backdoor ROTH IRA (I am above the limits for a standard ROTH IRA contribution) separately for myself and my wife (who doesn't have any income). Will my Backdoor ROTH IRA conversion have complications due to the Traditional IRA which I will now create due to the 401k rollover? Will I be affected by the pro-rate rules when I do the backdoor conversion since at this point, I will have a significantly large amount in my Traditional IRA? Does it matter if I do a backdoor ROTH IRA before/after I change employers and do the 401k rollover to the IRA later?
I am not sure if my new employer has Fidelity or not? If they do, am I better off moving the 401k money to the 401k with the new employer and thereby create no IRA as a result of the rollover in the process?
Looking for advise on how to move forward in this situation and take the full benefit of the Backdoor ROTH and the 401k rollovers.
Thanks.
I have a question regarding the impact on a Backdoor ROTH IRA in the same year that I am switching employers and moving my existing 401k (both traditional and ROTH) into an IRA.
So here is the situation in more detail -
At my current employer, I max out my pre-tax traditional 401k and also contribution to an after-tax Roth 401k via in-plan conversion that my employer provides via Fidelity. So I have "x" amount in my traditional 401k and "y" amount in my Roth 401k (after-tax). Now, I am changing jobs soon so I need to rollover my existing 401k accounts to their corresponding IRA equivalents and I have now have a traditional IRA with "x" amount and ROTH IRA with "y" amount.
I am also planning on doing a Backdoor ROTH IRA (I am above the limits for a standard ROTH IRA contribution) separately for myself and my wife (who doesn't have any income). Will my Backdoor ROTH IRA conversion have complications due to the Traditional IRA which I will now create due to the 401k rollover? Will I be affected by the pro-rate rules when I do the backdoor conversion since at this point, I will have a significantly large amount in my Traditional IRA? Does it matter if I do a backdoor ROTH IRA before/after I change employers and do the 401k rollover to the IRA later?
I am not sure if my new employer has Fidelity or not? If they do, am I better off moving the 401k money to the 401k with the new employer and thereby create no IRA as a result of the rollover in the process?
Looking for advise on how to move forward in this situation and take the full benefit of the Backdoor ROTH and the 401k rollovers.
Thanks.
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