[USER]

My wife has left her job and has $240K+ in her 401K. Should I roll this over into ROTH IRA or Traditional? Is paying $50K+ worth paying in taxes?

[Tin]

How old are you? What’s your tax bracket? How much longer do you plan on saving/working for before retiring? Will you future contributions be Roth or traditional? Do you have kids? Do you think you’ll be making more money in the future?

[Jule]

I wouldn’t as it might bump you into the next tax bracket making the whole move more expensive than necessary.

I’d just roll it into a traditional IRA and if you really insist on Roth conversions, do it gradually filling up your current tax bracket and no more.

You can check also: What do you all do with any rollover money?

[Sean]

I wouldn’t. Unless she doesn’t plan to work the rest of the year and you expect it to be a super low income year.

Almost never makes sense.

[Tom]

Only pay tax to convert an IRA to a Roth IRA if you believe your tax bracket is lower today than you believe it will be in the future.

It mathematically is a bad idea to convert if your bracket is higher than you believe it will be in the future.

[Brad]

Would you plan to pay taxes from the 401k account, or do you have cash to pay the taxes? If paying from 401k, then hard no. If paying cash, I’d spread out the Roth conversion over multiple tax years.

[Author]

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