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Rollover 403b to traditional IRA with existing backdoor roth IRA?

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  • jfoxcpacfp
    replied
    Can you give us some clarification on the Roth IRA? Did you convert from a non-deductible TIRA to a Roth in 2021 or in a prior year?

    Also, does your new plan allow rollovers from other employer plans? You need to check before making the assumption - most plans do, but not all.

    Finally, will you be in a lower tax bracket this year than you will in the future? If so, that might support a consideration of rolling at least a portion of the 403b to a Roth IRA.

    IF your new plan allows roll-ins and IF you didn’t convert from a post-tax TIRA to a Roth in 2021, there is no problem will rolling the 403b out to a TIRA. You can even make a backdoor Roth conversion for 2021’s after tax TIRA contribution if you wait until early 2022. Then roll the 403b to the new 401k before 12/31/22.

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  • spiritrider
    replied
    Any year you do a Roth conversion with non-deductible traditional IRA basis, there will be prorata taxation of all pre-tax balances in all traditional, SEP and SIMPLE IRA accounts on 12/31.

    If you have done such a conversion this year, as pointed out by CordMcNally you should not rollover your 403b to a traditional IRA. The relative timing of the Roth conversion and rollover are irrelevant.

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  • CordMcNally
    replied
    That’s probably what I’d do but, again, someone may chime in with a better plan.

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  • bmh12
    replied
    Ok thanks. And then roll 403b into new 401k?

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  • CordMcNally
    replied
    Just one clarification, you have a Roth IRA. There’s no such thing as a ‘backdoor Roth’ account. The backdoor term is used to describe the process someone that is ineligible for a direct Roth uses. Some of those more savvy with retirement plan options may chime in with a more efficient and better option but I’d probably leave it there for a year to avoid any headaches.

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  • bmh12
    replied
    Yes. They offer a 401k with Charles Schwab but I am ineligible for the first year from start of employment.

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  • CordMcNally
    replied
    Does your new employer offer a retirement plan?

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  • Rollover 403b to traditional IRA with existing backdoor roth IRA?

    Hello,

    I have started a new job and have a 403b through my prior employer. The investment options are limited and I'd like to rollover that 403b to a traditional IRA. However, I have an existing backdoor Roth IRA. Are there better options for what to do with that 403b?

    Thanks in advance!
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