Backdoor Roth affected by 401k?

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determined0331
Posts: 21
Joined: Tue Feb 27, 2018 10:18 pm

Backdoor Roth affected by 401k?

Post by determined0331 » Mon Mar 12, 2018 8:04 pm

Personal retirement accounts include

Traditional IRA
Roth IRA
SEP IRA (for my self employment income)
Roth 401k (workplace plan with terrible options) used for match

I plan to open an individual 401k at Fidelity since they accept rollovers. Rollover the traditional IRA and the SEP IRA into the newly opened i401k. This will leave me with...

Roth IRA
i401k
401k from work

Would this eliminate the pro rata issue for me? As I understand pro rata will not affect my 401k or i401k?

Spirit Rider
Posts: 9173
Joined: Fri Mar 02, 2007 2:39 pm

Re: Backdoor Roth affected by 401k?

Post by Spirit Rider » Mon Mar 12, 2018 8:21 pm

Yes, this would remove the pro-rata issue

A couple of points. You need to have self-employment earned income to adopt a one-particpant 401k and you can't have contributed to a 5305-SEP IRA for the 2018 tax year. For the 2017 tax year is fine.

determined0331
Posts: 21
Joined: Tue Feb 27, 2018 10:18 pm

Re: Backdoor Roth affected by 401k?

Post by determined0331 » Mon Mar 12, 2018 8:41 pm

Ok great thanks for clearing that up. Should be in the clear. SEP was only contributed to for 2017 tax year. I contract so have plenty of 1099 income to support a i401k. Thank you!

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