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Backdoor Roth rolling Trad IRA to 401K To Unblock

Posted: Mon Nov 19, 2018 1:29 am
by Br69102
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!

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

Posted: Mon Nov 19, 2018 2:34 am
by ivk5
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.

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

Posted: Mon Nov 19, 2018 2:57 am
by toblerone
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.

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

Posted: Mon Nov 19, 2018 6:54 am
by AllMostThere
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:

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

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