How to eliminate IRAs to allow backdoor Roth

[PeterParker]

My wife and I are both hospital employed and have 403b accounts with our hospital.  I also have a side gig and have a solo 401K set up.  We are thinking about moving jobs and were trying to figure out options for rolling over our hospital 403b accounts.

We want to avoid potential taxes with the pro rata rule with continuing to fund a backdoor roth.  I can rollover my 403b account into my solo 401k to avoid a rollover IRA.  I wasn't sure what to do with my wife's 403b as she doesn't have a solo 401k.  Can we rollover her 403b account into my solo 401k as well to avoid a rollover IRA?  What other options would I have?

[jfoxcpacfp]

No, you can't cross-contaminate your IRAs. Each IRA must stay with the owner until death. Your wife has a few choices:

• Roll into her new job's plan. Something to ask about as she is interviewing; not all employer plans accept rollovers, but most do. The downside of doing this is that her funds will be locked into the new employer's plan and investable assets as long as she works there.


• Convert to a Roth and pay taxes. She can do this over a multi-year period if you are bumping up on a higher tax bracket.


• Take a side gig in her name and set up her own SOLO-k.


• You can hire her and she can set up a SOLO-k under you.


• Leave the 403b behind until she can accomplish one of the above.

It's important to understand the 2-step process of backdoor Roths (see below post). You cab take care of step 1 (which you should never skip) for years until you complete step 2, after you've been able to take advantage of one of the above choices.

Explaining Backdoor Roth IRAs