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What do I do with a 401k from an old job?

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  • What do I do with a 401k from an old job?

    I currently work two part time jobs. One as a W2 where I max out my 403(b)18k and the other job is 1099 work. I have an old job with a 403(b) with 28k sitting in it. I was told by Fidelity (the plans holder) that I have the option of rolling this over and that I'm paying fees right now so it's probably better for me to roll it over.
    What should I do with that? Now that I have some 1099 income, I was hoping I can roll over part into a backdoor Roth IRA and the balance into a solo 401k) even while maxing my current w2 employee 403(b) out to the maximum 18,000? All with the understanding I'll have to pay back taxes for the $5,500 backdoor Roth IRA?
    Does this sound reasonable for me to do? My guess is I'd have to just make sure the proper tax documents are filed by my CPA during tax time?
    What did you do (or do you plan on doing) with one of your old 401(k) plans? Just keeping it there I suppose is another option?

  • #2
    You won't roll the 403b into a backdoor Roth IRA, but you can contribute to a nondeductible TIRA and convert to an IRA - that is the "backdoor Roth IRA" maneuver.

    With 1099 income, you've got the perfect scenario: Set up a SOLO-k based upon the profits of your IC work. Roll the 403b into it. Your backdoor Roth IRA will not be taxable. If you want even more to go into a Roth, then open your SOLO-k at a custodian that allows you to have a Roth component in your 401k so you can put some of your annual contributions into it. TDA does and I think I saw a list of 2 or 3 more custodians that do in a recent thread. You can also convert all or part of the 403b directly to a Roth IRA.

    Next January, the custodian(s) will send you the proper paperwork for your CPA to report these transactions.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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