Backdoor Roth rolling Trad IRA to 401K To Unblock

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Br69102
Posts: 9
Joined: Sun Jan 13, 2013 2:21 am

Backdoor Roth rolling Trad IRA to 401K To Unblock

Post by Br69102 » Mon Nov 19, 2018 1:29 am

Hi All,

Quick question on rules for back door Roth. Years ago I rolled a 401K plan into a traditional IRA when I changed employers. Now, years later in anticipation of the backdoor I've learned through this site I may have blocked that opportunity. My question - if I now roll my traditional IRA into my current employers 401K plan does that open up the possibility again?

Thanks for the help!

ivk5
Posts: 479
Joined: Thu Sep 22, 2016 9:05 am

Re: Backdoor Roth rolling Trad IRA to 401K To Unblock

Post by ivk5 » Mon Nov 19, 2018 2:34 am

Yes, assuming no other IRAs in your name.

The pedants may point out that there are no rules for backdoor Roth per se, because it’s not a “thing”; it’s an informal, colloquial term.

toblerone
Posts: 113
Joined: Thu Mar 07, 2013 11:42 pm

Re: Backdoor Roth rolling Trad IRA to 401K To Unblock

Post by toblerone » Mon Nov 19, 2018 2:57 am

Yep, the opportunity was never "blocked". Anyone with earned income can perform the steps of this colloquial term. Whether they pay tax during the conversion is the question. Getting that tIRA into your 401k will help prevent that.

AllMostThere
Posts: 68
Joined: Sat Dec 31, 2016 2:04 pm

Re: Backdoor Roth rolling Trad IRA to 401K To Unblock

Post by AllMostThere » Mon Nov 19, 2018 6:54 am

Yes, most definitely. Assuming it's allowed, roll all your tIRA's back into you 401k. With $0 tIRA balance you will be strategically set up for BOTH Backdoor Roth IRA and Mega Backdoor Roth IRA (again, assuming your 401k allows in-service withdrawals). If pursuing this route, be sure to inform you tIRA custodian to NOT close you tIRA as you will need this account moving forward. I've been doing this for years. DW and I will be plowing ~ $40K per year into Roth IRA's over next couple years with this strategy. I almost feel a little naughty, but it's allowed. :twisted:

Alan S.
Posts: 7855
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Backdoor Roth rolling Trad IRA to 401K To Unblock

Post by Alan S. » Mon Nov 19, 2018 12:38 pm

It would be accurate to say that a 401k to IRA rollover raises the possibility of not being able to get the pre tax IRA balance back out of the IRA because now the reverse rollover is contingent on being employed and the employer plan allowing IRA rollovers into their plan. In addition, if you rolled the old 401k into an IRA account that ever accepted regular IRA contributions, the chance of not being able to roll it back are increased because some 401k plans will accept IRA rollovers ONLY from rollover IRA accounts.

The larger the employer, the more likely their plan will accept IRA rollovers.

Post Reply