Need help to understand tIRA rIRA conversion

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loklav
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Joined: Fri Nov 10, 2017 11:39 pm

Need help to understand tIRA rIRA conversion

Post by loklav » Tue Nov 14, 2017 1:46 pm

Hi,

I think I started to understand why it could be interesting for me to do a backdoor rIRA:
- my tax filling status is : married filling jointly
- our MAGI is > 196K
- my wife does not have a 401k and I have one, that I just recently this year rollovered to a fresh new IRA (I don't have any other tIRA or rIRA)

So because of our MAGI, a contribution to a tIRA (max $5500), will be non deductible, right? so if I do this (non deductible) contribution and then I convert the tIRA to a rIRA, the contribution is still not deductible but will grow tax-free. In my wife situation I suppose it's a no brainer, right?

In my case, once I maxed out my 401k employer contribution, I should also do the same thing: contribute to a tIRA and backdoor to a rIRA? But I'm not exactly to understand how to do it... I mean my rollover tIRA contains only what was in my previous employer 401k: can I just rollover everything to my new employer 401k? Nothing special to do on my tax return? What about the part that grown up since I last rollovered the 401k?

And now that I have hidden my tIRA, I can just contribute 5500K (and NOT allocate it to any funds?) and immediately rollover?

Thanks for your help!

DSInvestor
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Re: Need help to understand tIRA rIRA conversion

Post by DSInvestor » Tue Nov 14, 2017 2:00 pm

The TIRA deduction phase out happens because of 1) coverage by employer plan and 2) high income. Given your coverage by 401k and high income, TIRA contributions for you and your wife would be non-deductible.

If you contribute to TIRA, you it must be reflected in your tax return - so make sure to tell your tax preparer or tax software about the TIRA contributions. The deductible amount of the contribution will be seen in the 1040 tax form (IRA deduction line 32). The non-deductible amount (IRA basis) will be tracked in form 8606. Form 8606 is critical to avoid double taxation on Roth conversion or IRA withdrawal.

The key to handling the backdoor into Roth IRA in tax return is to 1) enter the TIRA contribution and 2) enter the Roth conversion. The trick comes when you have a Rollover IRA as form 8606's calculation of the taxable amount conversion aggregates your assets in TIRA, Rollover IRA, SEP-IRA and SIMPLE-IRA to determine whether you're doing a full or partial conversion. IRA basis is prorated on partial conversion. So if you have 45K Rollover IRA, 5K TIRA with 5K IRA basis, form 8606 considers you to have a 50K IRA with 5K basis. If you convert 5K (10% of total IRA), only 10% of the basis will be allocated to the the conversion resulting in a non-taxable amount of $500 and taxable amount $4500. You can avoid this proration of IRA basis by transferring your rollover IRA assets into your current 401(k) plan.

I suggest running through form 8606 to see how it works. Pay attention to line 6 which asks for IRA balances in TIRA (includes Rollover IRA), SEP-IRA and SIMPLE-IRA.
IRS Form 8606: https://www.irs.gov/pub/irs-pdf/f8606.pdf

Does your wife have any IRA assets? If yes, she would be subject to proration of IRA basis on partial conversion. Form 8606 handles IRA assets and conversions separately for each individual.
Last edited by DSInvestor on Tue Nov 14, 2017 2:04 pm, edited 1 time in total.

JW-Retired
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Re: Need help to understand tIRA rIRA conversion

Post by JW-Retired » Tue Nov 14, 2017 2:03 pm

loklav wrote:
Tue Nov 14, 2017 1:46 pm
- my wife does not have a 401k and I have one, that I just recently this year rollovered to a fresh new IRA (I don't have any other tIRA or rIRA)

So because of our MAGI, a contribution to a tIRA (max $5500), will be non deductible, right? so if I do this (non deductible) contribution and then I convert the tIRA to a rIRA, the contribution is still not deductible but will grow tax-free. In my wife situation I suppose it's a no brainer, right?
If wife has no existing tIRA, rollover IRA, SEP IRA, or Simple IRA...... and you understand how to fill out her 8606 form to document the maneuver, then IMO her's is a no-brainer.

But it's hard to follow when you are talking about your IRA and when it's your wife's? If you have a big rollover IRA you are not a backdoor Roth candidate.
JW
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DSInvestor
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Re: Need help to understand tIRA rIRA conversion

Post by DSInvestor » Tue Nov 14, 2017 2:08 pm

If your rollover IRA is big, pay attention to the expenses in your current 401k plan relative to the expenses in your IRA. If your IRA expense ratios are 0.10% and 401k are 1.1%, that's a 1% difference. If you transfer 500K into your 401k, you'd be paying an extra $5K/yr in expenses to hold the $500K in the 401k.

loklav
Posts: 16
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Tue Nov 14, 2017 2:22 pm

ooooh ok ...
Thank you both of you for these info!

"So if you have 45K Rollover IRA, 5K TIRA with 5K IRA basis, form 8606 considers you to have a 50K IRA with 5K basis. "
What if I don't do anything? If I keep my rollover tIRA (which was funded using my previous 401k). Does it mean that it's now non-deductible???

To clarify the situation:
I have : current employer 401k, a rollover tIRA (45K) created this year by rolling over my previous 401k
My wife has nothing (except me)

I'm not comfortable with the 8606, but I will look at it. It should be straightforward for my wife. I don't know either what to do with Turbo tax.
My concern is more with my exisitng rollover IRA.....

Bruno

DSInvestor
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Re: Need help to understand tIRA rIRA conversion

Post by DSInvestor » Tue Nov 14, 2017 2:31 pm

loklav wrote:
Tue Nov 14, 2017 2:22 pm

"So if you have 45K Rollover IRA, 5K TIRA with 5K IRA basis, form 8606 considers you to have a 50K IRA with 5K basis. "
What if I don't do anything? If I keep my rollover tIRA (which was funder using my previous 401k). Does it mean that it's now non-deductible???
After the 5K conversion in my example, you will have a 45K Rollover IRA with 4.5K of IRA basis.

It is much cleaner to isolate your IRA basis in the Traditional IRA by transferring the rollover assets into current 401k. In this case, form 8606 sees a 5K IRA with 5K basis. Your 5K conversion is 100% of the IRA and thus consumes 100% of the IRA basis. 5K conversion where 5K is non-taxable.

Note that form 8606 asks for IRA balances as of DEC 31 of the year that you did your conversion. If the conversion occurs in calendar 2017, it will be handled by the 2017 8606 which asks for IRA balances as of DEC 31, 2017. If the conversion happens in calendar 2018, it will be handled by the 2018 8606.

loklav
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Tue Nov 14, 2017 2:36 pm

DSInvestor wrote:
Tue Nov 14, 2017 2:31 pm
loklav wrote:
Tue Nov 14, 2017 2:22 pm

"So if you have 45K Rollover IRA, 5K TIRA with 5K IRA basis, form 8606 considers you to have a 50K IRA with 5K basis. "
What if I don't do anything? If I keep my rollover tIRA (which was funder using my previous 401k). Does it mean that it's now non-deductible???
After the 5K conversion in my example, you will have a 45K Rollover IRA with 4.5K of IRA basis.

It is much cleaner to isolate your IRA basis in the Traditional IRA by transferring the rollover assets into current 401k. In this case, form 8606 sees a 5K IRA with 5K basis. Your 5K conversion is 100% of the IRA and thus consumes 100% of the IRA basis. 5K conversion where 5K is non-taxable.

Note that form 8606 asks for IRA balances as of DEC 31 of the year that you did your conversion. If the conversion occurs in calendar 2017, it will be handled by the 2017 8606 which asks for IRA balances as of DEC 31, 2017. If the conversion happens in calendar 2018, it will be handled by the 2018 8606.
Yes I understand this point.
My comment was in the case that I do nothing at all (no backdoor, no rollover): I just keep my existing rollover IRA. Because it's now an IRA, and because of my MAGI, does it mean that I have 45K that are now non deductible? I mean, they were deductible when they were in my 401k. Now that I rollovered them in a IRA (traditional) did it change?
Just wondering if it was a mistake to rollover them in a IRA....

DSInvestor
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Re: Need help to understand tIRA rIRA conversion

Post by DSInvestor » Tue Nov 14, 2017 2:47 pm

loklav wrote:
Tue Nov 14, 2017 2:36 pm


Yes I understand this point.
My comment was in the case that I do nothing at all (no backdoor, no rollover): I just keep my existing rollover IRA. Because it's now an IRA, and because of my MAGI, does it mean that I have 45K that are now non deductible? I mean, they were deductible when they were in my 401k. Now that I rollovered them in a IRA (traditional) did it change?
Just wondering if it was a mistake to rollover them in a IRA....
The backdoor into Roth IRA includes 2 steps: 1) contribution to Traditional IRA and 2) Roth conversion.

If you keep your Rollover IRA and do NOT make any Traditional IRA contribution, your 45K Rollover is pre-tax. If you make a 5.5K contribution to Traditional IRA (non-deductible given your high income and coverage by employer plan), then you will have an aggregated IRA (Rollover + Traditional) of 50.5K with 5.5K IRA basis.

JW-Retired
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Re: Need help to understand tIRA rIRA conversion

Post by JW-Retired » Tue Nov 14, 2017 4:02 pm

loklav wrote:
Tue Nov 14, 2017 2:36 pm
My comment was in the case that I do nothing at all (no backdoor, no rollover): I just keep my existing rollover IRA. Because it's now an IRA, and because of my MAGI, does it mean that I have 45K that are now non deductible? I mean, they were deductible when they were in my 401k. Now that I rollovered them in a IRA (traditional) did it change?
Just wondering if it was a mistake to rollover them in a IRA....
No, the $45k is still pretax just like it was in the 401k. You can keep it until retirement if you want to, but you can only add non-deductible contributions to it because of your high income. This means you need to account for those new contributions (the accumulated "basis") in order to know how much will be taxable versus non-taxable when you take money out. If you keep the 8606 form bookkeeping right you won't get taxed twice on the non-deductible contributions, but you still pay tax on all their earnings when withdrawn, as well as the $45k pretax contributions and their earnings. Anything you take out will get taxed pro-rata based on the ratio of the basis to whole account.

This kind of account is very inferior to having that $45k in your 401k and making uncomplicated backdoor Roth contributions every year. The difference is there is never any tax on all the accumulated earnings in the Roth. Plus all the 8606 bookkeeping ends when you stop making backdoor Roth contributions, instead of lasting the life of a mixed pre/post tax tIRA account.

So yes, IMO the rollover was a mistake. I would put it back in your current 401k. :oops:
JW
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loklav
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Wed Nov 15, 2017 12:09 am

ok I understand, well I think :)

For my wife, I will do it: I understand how it works and I also found this guide for turbotax http://thefinancebuff.com/how-to-report ... botax.html

So I need to open a tIRA for my wife. I was going to ask if I should not avoid investing the money in some funds to keep it easy ... before doing the conversion. Also how long should I wait between my contribution to the tIRA and the conversition to the rIRA? In the link it's recommended to do it the same years and to wait for the money to settle down... ?

And for me, I will have to rollover to my current 401k before. Will I need to declare something specific on my tax return for these 2 rollovers? previous 401k to rollover IRA and rollover IRA to current 401k?

Next year, I will avoid doing more than $5500 non deductible contributions to our 2 tIRA, to be able to rollover them again.
So where should I save money in this situation, If I want to save more than $5500 (x2) per year? I will certainly maxout my 401k, but what can I use next (for my wife and I) since tIRA is no more n option?
Last edited by loklav on Wed Nov 15, 2017 2:07 am, edited 2 times in total.


loklav
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Wed Nov 15, 2017 10:23 am

loklav wrote:
Wed Nov 15, 2017 12:09 am
ok I understand, well I think :)

For my wife, I will do it: I understand how it works and I also found this guide for turbotax http://thefinancebuff.com/how-to-report ... botax.html

So I need to open a tIRA for my wife. I was going to ask if I should not avoid investing the money in some funds to keep it easy ... before doing the conversion. Also how long should I wait between my contribution to the tIRA and the conversition to the rIRA? In the link it's recommended to do it the same years and to wait for the money to settle down... ?
I think I will just do the conversion before the end of this year... Since I will first create a tIRA and fund it with $5500, and wait potentially a few weeks.. I don't see the point to buy some funds on my tIRA at all during this time... But will it be ok from an IRS pov?
loklav wrote:
Wed Nov 15, 2017 12:09 am
And for me, I will have to rollover to my current 401k before. Will I need to declare something specific on my tax return for these 2 rollovers? previous 401k to rollover IRA and rollover IRA to current 401k?
Any potential issues for this situation?
loklav wrote:
Wed Nov 15, 2017 12:09 am
Next year, I will avoid doing more than $5500 non deductible contributions to our 2 tIRA, to be able to rollover them again.
So where should I save money in this situation, If I want to save more than $5500 (x2) per year? I will certainly maxout my 401k, but what can I use next (for my wife and I) since tIRA is no more n option?
Thank you gostars, this is exactly what I was looking for. 529 and IBonds and CDs are not part of it... But this is a different subject that I want to talk about later, once I'm clear with the tIRA/rIRA/401k issues.

Thanks again all of you for your help, this forum is really amazing, I feel much more confident now!

JW-Retired
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Re: Need help to understand tIRA rIRA conversion

Post by JW-Retired » Wed Nov 15, 2017 10:38 am

loklav wrote:
Wed Nov 15, 2017 12:09 am
Next year, I will avoid doing more than $5500 non deductible contributions to our 2 tIRA, to be able to rollover them again.
loklav,
Be careful with describing what you are doing to your tax software or the person doing your taxes. The move of the tIRA to your 401k is a rollover, but the move from your tIRAs to Roth IRAs is a "conversion". A rollover incurs no taxes but a conversion usually does and needs to be reported differently. In the case of doing a backdoor Roth there is little or no tax on the conversion, but only because all or nearly all of what's converted is already post tax. A Roth conversion gets documented in part II of the 8606 form but a rollover is ignored by the 8606. (You need to become familiar with that form.)

Not positive, but I don't believe your rollovers need to be documented in your tax return. They do get reported to IRS via their form 5498, which you have nothing to do with. The 5498 gets reported by the fund company to the IRS in May of the year, so IRS knows everything you did regarding IRA/SEP/Simple/Roth contributions/conversions/rollovers. You will get a copy of 5498 but it's too late for your April tax return.

Maybe somebody here might know if there is any 1040 rollover reporting at all? I don't remember any but that's not too reliable. :wink:
JW

ps: If you can make your tIRA disappear into your 401k by Dec 31, 2017, then next year you could make two $5500 non-deductible contributions to your own tIRA. One for 2017 made before April 2017, and the other for 2018 made at the same time or later in the year. (You have to check a box to tell Vanguard which year the contribution is for.) Then Roth convert each of those soon after the contributions. Vanguard typically keeps an empty tIRA account open for a year or two, so you can contribute to that tIRA the next year. No need to keep opening another account.
Retired at Last

loklav
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Wed Nov 15, 2017 1:22 pm

JW-Retired wrote:
Wed Nov 15, 2017 10:38 am
loklav wrote:
Wed Nov 15, 2017 12:09 am
Next year, I will avoid doing more than $5500 non deductible contributions to our 2 tIRA, to be able to rollover them again.
loklav,
Be careful with describing what you are doing to your tax software or the person doing your taxes. The move of the tIRA to your 401k is a rollover, but the move from your tIRAs to Roth IRAs is a "conversion". A rollover incurs no taxes but a conversion usually does and needs to be reported differently. In the case of doing a backdoor Roth there is little or no tax on the conversion, but only because all or nearly all of what's converted is already post tax. A Roth conversion gets documented in part II of the 8606 form but a rollover is ignored by the 8606. (You need to become familiar with that form.)

Not positive, but I don't believe your rollovers need to be documented in your tax return. They do get reported to IRS via their form 5498, which you have nothing to do with. The 5498 gets reported by the fund company to the IRS in May of the year, so IRS knows everything you did regarding IRA/SEP/Simple/Roth contributions/conversions/rollovers. You will get a copy of 5498 but it's too late for your April tax return.

Maybe somebody here might know if there is any 1040 rollover reporting at all? I don't remember any but that's not too reliable. :wink:
JW
I think that makes sense :) everything is already pretaxed, and I didn't withdrawn anything, so I don't see why anything special should be added to my tax declaration...
JW-Retired wrote:
Wed Nov 15, 2017 10:38 am
ps: If you can make your tIRA disappear into your 401k by Dec 31, 2017, then next year you could make two $5500 non-deductible contributions to your own tIRA. One for 2017 made before April 2017, and the other for 2018 made at the same time or later in the year. (You have to check a box to tell Vanguard which year the contribution is for.) Then Roth convert each of those soon after the contributions. Vanguard typically keeps an empty tIRA account open for a year or two, so you can contribute to that tIRA the next year. No need to keep opening another account.
Ok, but do you agree that I can do everything in 2017, right? I don't need to wait 2018 to do the conversion?
And do I have to invest my $5500 in some funds temporarily (in the tIRA) before doing the conversion, or can I just keep the money in the tIRA and then convert? The IRS in all cases would know that this is a backdoor conversion so I don't see the point to wait several months, invest these funds and potentially complicate the 8606 declaration, before doing the conversion... Just transfer the money in the tIRA, wait 2 weeks and then convert.. this way I'm just converting the initial $5500... nothing more or less.

JW-Retired
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Re: Need help to understand tIRA rIRA conversion

Post by JW-Retired » Wed Nov 15, 2017 5:31 pm

loklav wrote:
Wed Nov 15, 2017 1:22 pm
JW-Retired wrote:
Wed Nov 15, 2017 10:38 am
ps: If you can make your tIRA disappear into your 401k by Dec 31, 2017, then next year you could make two $5500 non-deductible contributions to your own tIRA. One for 2017 made before April 2017, and the other for 2018 made at the same time or later in the year. (You have to check a box to tell Vanguard which year the contribution is for.) Then Roth convert each of those soon after the contributions. Vanguard typically keeps an empty tIRA account open for a year or two, so you can contribute to that tIRA the next year. No need to keep opening another account.
Ok, but do you agree that I can do everything in 2017, right? I don't need to wait 2018 to do the conversion?
And do I have to invest my $5500 in some funds temporarily (in the tIRA) before doing the conversion, or can I just keep the money in the tIRA and then convert? The IRS in all cases would know that this is a backdoor conversion so I don't see the point to wait several months, invest these funds and potentially complicate the 8606 declaration, before doing the conversion... Just transfer the money in the tIRA, wait 2 weeks and then convert.. this way I'm just converting the initial $5500... nothing more or less.
IMO, "doing everything" this late in the year is dangerous because there is only a few weeks left in 2017 for you to get your pre-tax tIRA moved to your 401k. It may not go smoothly. If there is some hitch and you don't get the move completed before 12/31/2017, then most of any Roth conversion in 2017 would be taxed. Line 6 in the 8606 form will ask for the value of all your tIRAs as of 12/31/2017 and it's critical for that number to be no more than the non-deductible contribution.

Much safer not to do any contributing/converting until the current pre-tax tIRA is safely hidden in your 401k.
JW
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loklav
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Wed Nov 15, 2017 5:46 pm

There is one 8606 by person, right?
So I agree with you, in my case I will certainly have to wait.

But concerning my wife, it should be ok right?

JW-Retired
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Re: Need help to understand tIRA rIRA conversion

Post by JW-Retired » Wed Nov 15, 2017 7:05 pm

loklav wrote:
Wed Nov 15, 2017 5:46 pm
There is one 8606 by person, right?
So I agree with you, in my case I will certainly have to wait.

But concerning my wife, it should be ok right?
Yes, wife backdoor Roth would be good to go this year.
JW
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loklav
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Wed Nov 15, 2017 8:53 pm

Ok great!
So the last part that you haven't answered:
1. these $5500 in the tIRA, do I have to invest them in some funds before doing the conversion or can I just keep them in "cash" in the tIRA ?(not sure what is the right term)
2. in the case of my wife, how long should I wait between funding the tIRA and the conversion to the rIRA? 2 weeks, 1 month... ? Is it important?

Thanks again for all your help!

JW-Retired
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Re: Need help to understand tIRA rIRA conversion

Post by JW-Retired » Wed Nov 15, 2017 9:04 pm

loklav wrote:
Wed Nov 15, 2017 8:53 pm
Ok great!
So the last part that you haven't answered:
1. these $5500 in the tIRA, do I have to invest them in some funds before doing the conversion or can I just keep them in "cash" in the tIRA ?(not sure what is the right term)
2. in the case of my wife, how long should I wait between funding the tIRA and the conversion to the rIRA? 2 weeks, 1 month... ? Is it important?

Thanks again for all your help!
1. I keep them in "cash" in the tira until I convert it to a roth in a few days, then I convert "all" so I don't leave a few pennies. 2. There is no IRS guidance for how long you leave it before converting. Some people give it a week or a month. I do it as soon as Vanguard allows me to, which is a few days.
JW
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loklav
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Wed Nov 15, 2017 9:23 pm

JW-Retired wrote:
Wed Nov 15, 2017 9:04 pm
loklav wrote:
Wed Nov 15, 2017 8:53 pm
Ok great!
So the last part that you haven't answered:
1. these $5500 in the tIRA, do I have to invest them in some funds before doing the conversion or can I just keep them in "cash" in the tIRA ?(not sure what is the right term)
2. in the case of my wife, how long should I wait between funding the tIRA and the conversion to the rIRA? 2 weeks, 1 month... ? Is it important?

Thanks again for all your help!
1. I keep them in "cash" in the tira until I convert it to a roth in a few days, then I convert "all" so I don't leave a few pennies. 2. There is no IRS guidance for how long you leave it before converting. Some people give it a week or a month. I do it as soon as Vanguard allows me to, which is a few days.
JW
ok looks like a plan! :)
I know what I will do this week-end now!

Can you tell me more about the 401k contribution limits.... this is $18000 per 401k account and globally $54000. So since I just joined a new employer, I can continue to contribute to the new 401k $54000 minus what I contributed with my previous employer?
Is it how it works?

And since I cannot contribute to a tIRA, I should always try to maxout the $18000/$54000 limits, right?

gostars
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Re: Need help to understand tIRA rIRA conversion

Post by gostars » Thu Nov 16, 2017 12:03 am

The limit is $18000 ($18500 in 2018) total in employee elective deferrals combined across all 401k plans you might have access to, plus some equivalents like 403b, SIMPLE, and SARSEP. The $54000 ($55000 in 2018) is per-employer counting both employee and employer contributions to that plan. The $54000 limit would mostly come into play for solo 401k plans where you contribute as the employer rather than the employee. So, you as an employee in 2017 can contribute $18000 minus what you contributed to a previous employer.

JW-Retired
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Re: Need help to understand tIRA rIRA conversion

Post by JW-Retired » Thu Nov 16, 2017 9:50 am

loklav wrote:
Wed Nov 15, 2017 9:23 pm
Can you tell me more about the 401k contribution limits.... this is $18000 per 401k account and globally $54000. So since I just joined a new employer, I can continue to contribute to the new 401k $54000 minus what I contributed with my previous employer?
Is it how it works?

And since I cannot contribute to a tIRA, I should always try to maxout the $18000/$54000 limits, right?
I never had more than the one 401k so not sure how it works with multiple employers. Someone else here will surely know.

As to always maxing out the $18000/$54000 limits, only you can decide when you might be saving enough tax deferred. Taxable savings are pretty useful too.
JW
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loklav
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Re: Need help to understand tIRA rIRA conversion

Post by loklav » Thu Nov 16, 2017 10:16 am

gostars wrote:
Thu Nov 16, 2017 12:03 am
The limit is $18000 ($18500 in 2018) total in employee elective deferrals combined across all 401k plans you might have access to, plus some equivalents like 403b, SIMPLE, and SARSEP. The $54000 ($55000 in 2018) is per-employer counting both employee and employer contributions to that plan. The $54000 limit would mostly come into play for solo 401k plans where you contribute as the employer rather than the employee. So, you as an employee in 2017 can contribute $18000 minus what you contributed to a previous employer.
Ok thanks makes sense.
Do I need to control how much I can still contribute with my new employer or he will know automatically?
JW-Retired wrote:
Thu Nov 16, 2017 9:50 am
loklav wrote:
Wed Nov 15, 2017 9:23 pm
Can you tell me more about the 401k contribution limits.... this is $18000 per 401k account and globally $54000. So since I just joined a new employer, I can continue to contribute to the new 401k $54000 minus what I contributed with my previous employer?
Is it how it works?

And since I cannot contribute to a tIRA, I should always try to maxout the $18000/$54000 limits, right?
I never had more than the one 401k so not sure how it works with multiple employers. Someone else here will surely know.

As to always maxing out the $18000/$54000 limits, only you can decide when you might be saving enough tax deferred. Taxable savings are pretty useful too.
JW
I don't have multiple employer at the same time, I though this $18000 limit was per employer.... I got it now.
Ok I don't yet know what are the funds available in my new employer's 401k. I will post these info later in this post to get your advises....

I have also some question related to investing in 529, trying to increase my monthly mortgage payment or ... So I will create a new post fr these questions.

Thanks all for your help!! I should have asked you before doing my first rollover ... :(

gostars
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Re: Need help to understand tIRA rIRA conversion

Post by gostars » Thu Nov 16, 2017 9:15 pm

loklav wrote:
Thu Nov 16, 2017 10:16 am
Ok thanks makes sense.
Do I need to control how much I can still contribute with my new employer or he will know automatically?
If you've contributed in the same year to another plan in the same class, you need to provide that information to your new employer/provider so they can limit your contributions. In plans I've dealt with in the past, this is a standard question they ask during enrollment.

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LadyGeek
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Re: Need help to understand tIRA rIRA conversion

Post by LadyGeek » Fri Nov 17, 2017 9:19 am

New member zoecat has a question which I've moved into a stand-alone thread: [Traditional to Roth IRA conversion - backdoor?]

I also moved one reply.
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