[Rebecca]

I don’t have millions by any stretch, but I have enough funds in tIRAs that a backdoor Roth doesn’t make a ton of sense. 

I could move all of those tIRAs to my 401k (it’s my company, fees are low, and VTSAX is available there) BUT for some reason I’m hesitating to do that.

I will be moving these tIRAs from where they currently are either way.  If not to my 401k, then to various Vanguard accounts…but the later may prevent backdoor Roth being an option in the future.

[Arun]

The only thing you might want to check is if your current 401(K) plan charges anything additional over the underlying fund fees. If not, it might make sense to keep everything in your 401(K) for doing Backdoor Roth.

Is the hesitation due to any true reason or just the fear of doing something for the first time?

FYI – In the last two weeks, I rolled over my VG TIRA into my employer 401(K) at Fidelity.

[Adam]

I transferred my Rollover IRA into my current company 401k.

Now I have the regular backdoor Roth IRA and Mega Backdoor Roth IRA option (which I’m on year 2 doing).

I’ll likely do a lump sum backdoor IRA contribution after tax filing as I usually have a bonus around then.

Don’t miss: Backdoor Roth conversion question: What do I do with that?

[Michael]

The 401k structure is superior to the IRA structure due to better protection from judgments, rule of 55 withdrawals, and enabling backdoor Roth contributions without pro-rata taxes.

Therefore, if I had access to a 401k plan with low-cost index fund choices then I would prioritize moving everything there.

[Amy]

Is the total tIRA balance too much to convert the whole balance over a few years to spread out the tax burden? I converted my tIRA to Roth over two years.

Something to consider is you potentially have more control in the IRA. If your 401k doesn’t allow ETFs for example, maybe you prefer AVUV but have to settle for a lower performing SCV mutual fund.

Another consideration is might you want to use the IRS rule of 55, in which case having more money in the 401k is a plus.

Explore these too: Accessing 401k in early retirement without 10% penalty, which is better SEPP or backdoor Roth?

[Nicholas]

Not sure of the question. Personally, I am on a mission to get as much into Roth IRAs as possible and doing backdoor and major conversions each year to do it. I believe in the long-term benefit for my kids if not us.

There are a bunch of calculators that can run scenarios for you to decide if it was worth it. Your CPA can help too.

We just don’t know what taxes will be like in the future but, given the government’s propensity to spend, they are unlikely to be less.

I appreciate it may not seem like a lot but every bit helps.

[Author]

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