In this video we’re answering the question “Is it worthwhile to roll my IRA into a 401(k) so I can do Backdoor Roth IRAs?” The White Coat Investor wants to help you stop doing dumb things with your money, so in this video series we answer questions you have submitted.

To get your questions answered by The White Coat Investor, visit and record your question.

The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs for specifically aimed at helping doctors. If you’re a high-income professional and ready to get a “fair shake” on Wall Street, The White Coat Investor channel is for you!

Subscribe Here:

Main Website:
Student Loan Advice:
Facebook:
Twitter:
Instagram:
Subreddit:
Online Courses:
Newsletter:

00:00 Is it worth rollingl my IRA into a 401(k) so I can do Backdoor Roth IRAs?
01:09 Are you better off investing in a Roth IRA or a taxable account?
01:30 Rolling into a 401-K
02:11 Converting to a Roth IRA
03:10 Investing in taxable accounts vs retirement accounts
04:38 Estate planning easier with a Roth IRA
04:57 59 1/2 rule exceptions…(read more)

LEARN MORE ABOUT: IRA Accounts

CONVERT IRA TO GOLD: Gold IRA Account

CONVERT IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

Is it Worthwhile to Roll My IRA into a 401(k) for Backdoor Roth IRAs?

Planning for retirement can be a complex and challenging endeavor, requiring careful consideration of various options to maximize your savings. One such option that has gained popularity in recent years is the backdoor Roth IRA. This strategy allows individuals with high incomes to contribute to a Roth IRA by converting traditional IRA funds. However, in order to execute this strategy effectively, some individuals choose to roll their traditional IRA funds into a 401(k) plan. But is it truly worthwhile to roll your IRA into a 401(k) for the purpose of conducting backdoor Roth IRAs? Let’s explore the factors involved.

Firstly, it is important to understand the mechanics of a backdoor Roth IRA. Those with incomes exceeding the Roth IRA contribution limits can still contribute indirectly by following a two-step process. First, they make a non-deductible contribution to a traditional IRA. Then, they convert these funds into a Roth IRA. However, if you already have pre-tax dollars in a traditional IRA, this can trigger tax liabilities, commonly known as the pro-rata rule. This rule requires you to include all funds in your traditional IRA, making it less desirable to execute a backdoor Roth IRA.

This is where rolling your traditional IRA into a 401(k) plan becomes valuable. By transferring your pre-tax dollars into a 401(k), you eliminate the pro-rata rule, making the conversion process more efficient. Furthermore, 401(k) plans often offer greater protection from creditors than IRAs, providing an additional layer of security for your retirement savings.

Another crucial consideration is the flexibility and investment options offered by your 401(k) plan. While IRAs generally provide a broader array of investment choices, some 401(k) plans offer a range of low-cost funds and access to institutional investment options. Reviewing the investment lineup of your 401(k) plan is vital in determining whether it offers adequate choices aligning with your investment strategy.

It is worth noting that there are certain factors to consider before deciding to roll your IRA into a 401(k). Firstly, evaluate the fees associated with your 401(k) plan, as it may impact the decision if they are significantly higher compared to your IRA. Additionally, analyze the plan’s withdrawal options. Traditional IRAs generally offer more flexible withdrawal options compared to 401(k)s, which might be important if you anticipate needing early access to funds.

Ultimately, the decision of whether to roll your IRA into a 401(k) hinges on your individual circumstances, financial goals, and investment preferences. Consulting with a financial advisor or tax professional can provide specific guidance based on your unique situation.

In conclusion, rolling your IRA into a 401(k) can be a valuable strategy if you plan to conduct backdoor Roth IRAs. By eliminating the pro-rata rule and potentially gaining access to better investment options, you can optimize your retirement savings strategy. However, carefully consider the associated fees and withdrawal restrictions before making a final decision. With the guidance of a professional, you can make an informed choice that aligns with your financial goals.