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IRA & Rollover Questions

1,267 Views | 8 Replies | Last: 6 yr ago by colonialag
Pepper Brooks
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AG
I am going to be switching jobs in the near future and have a few questions after reading the IRS website. Any assistance is appreciated.

-The salary from the new job will push our household income over the limit for contributing to a Roth IRA. If I'm reading this right, I'm not able to rollover the funds from my Roth into a Traditional IRA. Is that accurate? If so, does it simply stay where it is and continue to grow based on the funds performance? Can I simply convert the account to a traditional IRA?

Source: https://www.irs.gov/pub/irs-tege/rollover_chart.pdf

-I have a cash balance pension plan through my current employer along with a 401k. I assume I can only roll over the funds from one of these accounts to an IRA during the next 12 month period. Is that accurate?

-Is there any other benefit that I'm ignorant to for keeping my 401k and pension plans where they currently are? It seems like it makes the most sense to move them to my control ASAP.

TIA


libertyag
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BoilerAg10 said:



-I have a cash balance pension plan through my current employer along with a 401k. I assume I can only roll over the funds from one of these accounts to an IRA during the next 12 month period. Is that accurate?





You can do as many direct rollovers as you want, as long as they go trustee to trustee, The one in 12 months you are referring to involves instances where the money comes to you and then you, within the allowed 60 days, roll over the funds.
nactownag
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AG
If you rollover pre tax dollars to the IRA you will lose the ability to make backdoor Roth IRA contributions in the future. If that's a problem for you.
evan_aggie
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I just found out about the back-door Roth. I feel stupid for not having participated sooner! And here I thought I wasn't eligible.

Ragoo
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Increase your tax sheltering, ie; move to max your 401(k) to reduce your AGI. if you can get the AGI under the limit then no need to backdoor the ROTH.
aggiebq03+
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BoilerAg10 said:

-The salary from the new job will push our household income over the limit for contributing to a Roth IRA. If I'm reading this right, I'm not able to rollover the funds from my Roth into a Traditional IRA. Is that accurate? If so, does it simply stay where it is and continue to grow based on the funds performance? Can I simply convert the account to a traditional IRA?


Even if you can't contribute to a Roth IRA, you can leave anything already in the Roth IRA as is. The money already in the account and any gains stay in that account. DO NOT convert this to a traditional IRA. You already paid taxes on this money and will never pay taxes on it or any gains ever again (unless they change the law at least). You can buy, sell, movenit to another investment company, or do anything you want as long as it stays in a Roth IRA.

Sorry if that wasn't your question and I misunderstood.
Pepper Brooks
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AG
That helps a lot. Thanks!

Thanks for the other replies as well. It sounds like I just need to open up a traditional IRA to handle the 401k/pension transfer and move my contributions there.
aggiebrad94
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AG
I didn't see an answer to one of your questions - I would NOT - under any circumstances - leave your funds with a previous employer. There are typically administration costs built into your 401k that you are paying. Too many free IRA accounts out there with thousands more investment options.
nactownag
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aggiebrad94 said:

I didn't see an answer to one of your questions - I would NOT - under any circumstances - leave your funds with a previous employer. There are typically administration costs built into your 401k that you are paying. Too many free IRA accounts out there with thousands more investment options.


I'm not sure this is good advice is all situations
colonialag
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This is not a guarantee. Some plans have great options with access to institutional share classes you won't have in your own IRA. Any administrative fees will also vary from company to company.
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