When Should You Roll Over a Traditional IRA/401(k) into a ROTH Plan?
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I am 40 years old. I had a traditional 401K from a previous employer and rolled over that account to my current employer. I started contributing to a Roth 401k. Can I rollover the Roth 401K part to a Roth IRA? without any penalties as long I do not use the funds until I am 59 1/2?
0k I'm a working 60yrs…with 401k… can I roll over small withdrawals to Roth this side of 401k, while keeping to contribute to 401k?
Excellent point in regards to State Income Tax implications as well most just focus on Federal.
Is it a good time to convert as well if you decide one year you’re not gonna work as much and us being at a lower tax bracket?
I have 2 Rollover IRA's and a Roth IRA with Fidelity. I would have to pay taxes on the Rollover IRA if I move them to the Roth IRA?
It might also be good to do conversions in years where, based on the political climate, tax rates are lower than they are likely to be in the future. I did $32k of conversions this year for that reason.
Never convert a 401k to a Roth. Keep the money earning tax free as long as you can. When you do start to draw it down in retirement you will only owe Federal and State taxes. You pay no FICA or MedFica and you no longer have the 401k deductions taken out. Compounding over 40 years works wonders for your 401k retirement account. You should never withdraw more than you need to live in one year. You will never run out of money before you die…
I think I'm making more money now than I will in retirement, so doesn't it make sense to take the bigger tax break now compared to when I'm retired and making considerably less with my pension? What if the government changes the tax laws in the future? Contributing to the traditional is helping me in the right here, right now.
Another consideration: doing the conversion when you actually have the money to pay the taxes. ie. while you are working…
I have an abundance of available money now (after maxing 401k, HSA, etc) and can afford to pay the taxes now. In retirement, I might not have the budget for paying the conversion taxes…
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When you have consistently maxed out your HSA investment account and need more flexibility to have “splurge years” in retirement?
I’m just kinda confused on what taxes I would pay on the money I convert to a Roth 401k (less than 10k).. I normally get a decent size tax return so that’s why I think it’s possible if it’s only around $2k in taxes – 22% of the dollar amount being converted. But I do have a Roth IRA and HSA so keeping a traditional 401k may be better?