Rollover from traditional IRA to DCP (401a)?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
hotrodz
Posts: 7
Joined: Thu Jan 18, 2018 7:37 pm

Rollover from traditional IRA to DCP (401a)?

Post by hotrodz » Tue Feb 12, 2019 1:51 am

My wife has a deductible tIRA at Vanguard that we funded a few years back when we could claim the deduction. Our income now does not allow her to get either a tIRA deduction or direct Roth contribution.

I’m looking for a way to enable contributions to her backdoor Roth IRA.

She has access to a UC DCP (401a) from her previous employer (grad school) via Fidelity that only contains pretax money. She called and talked to a rep and they said it should be ok to rollover, although I don’t think she mentioned she was not employed at UC anymore.

She currently has a 403b with UT also via Fidelity but the rep told her she could not rollover into that plan.

She has good fund options both with the DCP and 403b, and I’d rather rollover the money than convert and pay the taxes now.

Does anyone have experience doing this type of rollover? And is it okay to rollover into the DCP even if she doesn’t work there anymore?

Appreciate the feedback 👍

Silk McCue
Posts: 2044
Joined: Thu Feb 25, 2016 7:11 pm

Re: Rollover from traditional IRA to DCP (401a)?

Post by Silk McCue » Tue Feb 12, 2019 9:04 am

Just call them back and see if she can still rollover now that she is not employed there. If so, your plan is a good one as opening up Backdoor Roth process when you can't contribute directly is a great idea.

If the balance on the IRA isn't excessively large it may be advantageous to bite the bullet to pay taxes on conversion in order to open up access to the Roth IRA. That was the right answer for another couple on a thread last year but we knew their financial particulars and could provide clearer advice.

Cheers

Topic Author
hotrodz
Posts: 7
Joined: Thu Jan 18, 2018 7:37 pm

Re: Rollover from traditional IRA to DCP (401a)?

Post by hotrodz » Tue Feb 12, 2019 5:54 pm

Silk McCue wrote:
Tue Feb 12, 2019 9:04 am
Just call them back and see if she can still rollover now that she is not employed there. If so, your plan is a good one as opening up Backdoor Roth process when you can't contribute directly is a great idea.

If the balance on the IRA isn't excessively large it may be advantageous to bite the bullet to pay taxes on conversion in order to open up access to the Roth IRA. That was the right answer for another couple on a thread last year but we knew their financial particulars and could provide clearer advice.

Cheers
Thanks! She called and they said it's not a problem to rollover even though she's no longer employed there. I was not familiar at all with a DCP but this seems like the best plan for this year.

Silk McCue
Posts: 2044
Joined: Thu Feb 25, 2016 7:11 pm

Re: Rollover from traditional IRA to DCP (401a)?

Post by Silk McCue » Tue Feb 12, 2019 6:00 pm

hotrodz wrote:
Tue Feb 12, 2019 5:54 pm
Silk McCue wrote:
Tue Feb 12, 2019 9:04 am
Just call them back and see if she can still rollover now that she is not employed there. If so, your plan is a good one as opening up Backdoor Roth process when you can't contribute directly is a great idea.

If the balance on the IRA isn't excessively large it may be advantageous to bite the bullet to pay taxes on conversion in order to open up access to the Roth IRA. That was the right answer for another couple on a thread last year but we knew their financial particulars and could provide clearer advice.

Cheers
Thanks! She called and they said it's not a problem to rollover even thougheshe's no longer employed there. I was not familiar at all with a DCP but this seems like the best plan for this year.
Excellent. Thanks for providing an update.

Cheers

Post Reply