Rollover from Fidelity to less preferable 401K plan to make back-door?

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njay73
Posts: 85
Joined: Wed Jan 01, 2014 9:47 am

Rollover from Fidelity to less preferable 401K plan to make back-door?

Post by njay73 » Fri Nov 15, 2019 3:06 am

I have a rollover IRA with fidelity about 190K(10% of total portfolio), I have not done only one back-door Roth conversions n past
but I am thinking if back-door ( or Roth space)
1) is this important and advisable for me?
2) if I do the back-door I have two options: does it make sense given - 401K, which is managed by Empower Retirement. Plan offers limited bond options, most of my dollar is in stable fund, other options are long term TIPS and intermediate investment grade bonds ( no tickers). After that do the rollover without any tax implications. besides that I don’t like empower website and not sure if they will handle the rollover back efficiently.

or should I still do Roth and pay the taxes ( probably does not make sense)

Any other thing that I should consider.

Thanks in advance

Cheryl604
Posts: 131
Joined: Sat May 24, 2014 12:24 pm

Re: Rollover from Fidelity to less preferable 401K plan to make back-door?

Post by Cheryl604 » Fri Nov 15, 2019 3:58 am

What is fidelity ira invested in? To me, the not great options in your 401k don't seem worth it. Losing growth potential on 190k is a major consideration. What are the 401k fees? Backdoor Roth is only 6k a year, not sure it makes sense unless you have a lot of years ahead of you to contribute. Even then, I probably wouldn't.

Topic Author
njay73
Posts: 85
Joined: Wed Jan 01, 2014 9:47 am

Re: Rollover from Fidelity to less preferable 401K plan to make back-door?

Post by njay73 » Fri Nov 15, 2019 4:36 am

Cheryl604 wrote:
Fri Nov 15, 2019 3:58 am
What is fidelity ira invested in? To me, the not great options in your 401k don't seem worth it. Losing growth potential on 190k is a major consideration. What are the 401k fees? Backdoor Roth is only 6k a year, not sure it makes sense unless you have a lot of years ahead of you to contribute. Even then, I probably wouldn't.
thanks
100% of 190K FXNAX (Fidelity® U.S. Bond Index Fund). so I will being to total bond to stable + TIPS ( er in 401K are not bad) I am thinking I have at least 10 more year so 60K is so yes agree with you probably does not make sense.

mervinj7
Posts: 1153
Joined: Thu Mar 27, 2014 3:10 pm

Re: Rollover from Fidelity to less preferable 401K plan to make back-door?

Post by mervinj7 » Fri Nov 15, 2019 8:43 am

njay73 wrote:
Fri Nov 15, 2019 4:36 am
Cheryl604 wrote:
Fri Nov 15, 2019 3:58 am
What is fidelity ira invested in? To me, the not great options in your 401k don't seem worth it. Losing growth potential on 190k is a major consideration. What are the 401k fees? Backdoor Roth is only 6k a year, not sure it makes sense unless you have a lot of years ahead of you to contribute. Even then, I probably wouldn't.
thanks
100% of 190K FXNAX (Fidelity® U.S. Bond Index Fund). so I will being to total bond to stable + TIPS ( er in 401K are not bad) I am thinking I have at least 10 more year so 60K is so yes agree with you probably does not make sense.
Is your AA 100% bonds?

mhalley
Posts: 7654
Joined: Tue Nov 20, 2007 6:02 am

Re: Rollover from Fidelity to less preferable 401K plan to make back-door?

Post by mhalley » Fri Nov 15, 2019 5:00 pm

I see from another post you are 49 and retiring in 5 years, so I would say it is not worthwhile. You might check out POF posts on the value of the backdoor Roth.
https://www.physicianonfire.com/?s=Value+back+door

Spirit Rider
Posts: 11902
Joined: Fri Mar 02, 2007 2:39 pm

Re: Rollover from Fidelity to less preferable 401K plan to make back-door?

Post by Spirit Rider » Fri Nov 15, 2019 6:04 pm

mhalley wrote:
Fri Nov 15, 2019 5:00 pm
I see from another post you are 49 and retiring in 5 years, so I would say it is not worthwhile. You might check out POF posts on the value of the backdoor Roth.
https://www.physicianonfire.com/?s=Value+back+door
This advice is seriously misguided and does not reflect that there are far more benefits to Roth IRA contributions than tax rate attribution. Having the ability to control your AGI/MAGI especially in early retirement can be critical. Not to mention the details of the analysis have been debunked on here for the vast majority of people with < the 37% marginal tax bracket. Try searching.

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