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Question about 403(b) -> rollover traditional IRA, backdoor roth eligibility

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  • Question about 403(b) -> rollover traditional IRA, backdoor roth eligibility

    Hello all,

    Currently in a residency program offering 403(b). It is my understanding that after residency it is recommended to rollover this 403(b) to a traditional IRA as this offers more options. But it is also my understanding is that you must have a traditional IRA balance of $0 before making a $5500 traditional IRA contribution and then converting it to a backdoor Roth.

     

    If I want to take advantage of the backdoor Roth, after residency shouldn't I just leave my 403(b) funds as is or roll it over to my future employer 401(k) plan, instead of rolling it over to a traditional IRA?

     

  • #2




    Hello all,

    Currently in a residency program offering 403(b). It is my understanding that after residency it is recommended to rollover this 403(b) to a traditional IRA as this offers more options. But it is also my understanding is that you must have a traditional IRA balance of $0 before making a $5500 traditional IRA contribution and then converting it to a backdoor Roth.

     

    If I want to take advantage of the backdoor Roth, after residency shouldn’t I just leave my 403(b) funds as is or roll it over to my future employer 401(k) plan, instead of rolling it over to a traditional IRA?

     
    Click to expand...


    That's correct.  If your 403(b) has good enough investment options and fees, then you should just leave the money there.  An exception is if you get a new 401(k) or 403(b) which you like better, for instance a self-employed 401(k), and then you can roll it into there.

    The people making recommendations to rollover to traditional IRAs do not understand or know about backdoor Roth.

    Comment


    • #3
      Very helpful, thanks!

      Comment

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