Rollover old 401k to Roth IRA?
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- Опубліковано 5 лип 2024
- Can you rollover your old 401k to a Roth IRA in one fell swoop? We get this question all the time here at jazz wealth and today we will talk about the process of rolling over a 401k to an IRA or Roth IRA and what you should consider.
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Spend 30 minutes on the phone with fidelity to get an answer you gave me in 6 minutes. Thank you
This was awesome. Summarized everything I have been looking to learn in less time than anyone else could present it. Thanks!
Thank you so much - I never moved my money because a certain bank(one that had an issue creating false accounts) who manages it said "you will pay penalties and taxes if you move it to another bank... But I can offer you X product with us." I was like how the heck am I not going to get screwed? I found this channel and when I am ready I will call you.
Thanks for the simple and clear explanation!
this video is a gem sir! I was definitely about to convert my whole rollover to a roth. Thank you for this!
I'm in the same situation.
Good thing I saw this video before create my roth ira.
I recently rolled over a small amount of money from an old 401k directly into a new Roth IRA. Both the 401k and and the new Roth IRA are managed by Fidelity. Fidelity paused the transaction until I spoke to a live representative and they could verify that I was fully aware that the transaction would be a taxable event for me and that I would be able to deal with the tax implications. I believe some 401k plans don't allow partial distributions. In that case you would want to use the intermediate Rollover IRA to hold the pre-tax funds until you were ready to pay taxes on them. This was unnecessary in my case because they allowed a relatively small partial distribution that I was fully prepared to pay taxes on. Also, all the funds in that 401k were all pre-tax so I didn't have to worry about the 2 check pre and post tax scenario.
Thanks for the info man.... Great thing to consider before moving every $$ from 401k to Roth IRA
Great video. I followed this process exactly. It’s a good time to do a conversion if you have the tax $ and it’s in your overall plan. Thanks!
Thanks Dustin great info getting ready to do taxes now, and was thinking about conversion's
EXCELLENT! Thank you!
I love the There's Something About Mary hairstyle today!
Hahahaha "ooOOooO what's that, umm hair gel"
Now I can’t un see that
Is that hair gel?
Thank you!!!
Thank you, very informative!
Very helpful
Great video
You saved me from making a huge mistake. Thank you I
Hey. Thanks for the information! It's what I needed. Also ☝🏾☝🏾 what type of blackboard is that? In a different vid of yours, it looked regular, but then appeared electronic. Can you give the brand or at least what it's called? Thanks
Very nice, but I think you had an important omission. When you convert, you can use your IRA funds as the source to pay the tax if over 59.5 WITHOUT penalty. Age 59.5 to age 70 is a prime time for doing conversions, especially if retired and in a low tax bracket.
I did this without penalty and just paid taxes
Thank you for this video. I have a 403b and 457 along with a Fidelity ROTH IRA. This was my plan to rollover this into my ROTH. Now I know I will need to get with my tax accountant to do it over 3-4 years because of taxes.
When you talk with them, the conversion strategy is called a conversion ladder. By doing the conversion over several years you avoid paying high taxes (or any) depending on your gross income. It's why many just leave the Traditional/Rollover IRA open and wait until they are actually retired before converting (no income).
Good Advice
Helpful
Thanks , just converted some funds to Roth. Yes u absolutely have to pay taxes out of ur own funds to avoid penalties. I’m trying to convert as much as possible just in case we have tax changes that could increase amt of taxes due. I just don’t know what’s best, u pay now or pay later.
OMGOMGOGMGGMGGOG THANK YOU THANK YOU!!!!!
Asking for my daughter, can you do the conversion while your still working for the company?
Can you trade within the rollover ira without fees/penalties?
If converting only a portion from Roll IRA to Roth, will you run into IRA Aggregation Rule? Do you have to withdrawal all from 401k at one time? Is the only downside to direct-to-roth that you pay tax on full amount?
All I have is a 401k I have about 15 to 20 years or work left, should I open Roth IRA and build that account up the rest of my time before I retire?
Wow this is at least your fourth video on rolling a 401k to a Roth IRA, beating a dead horse but good info
Or perhaps if someone has a substantial 401(k) and/or already rolled an old 401(k) into your current one, i wonder if it would make sense to roll 75-80% into a Roth IRA, but keep a balance in the 401(k) because (a) still contributing, so want to keep it open, and (b) in case you need/want to take a 401(k) loan out, you’ll need a balance in there.
Hi Dustin,
Great video. I just subscribed and looking forward to more content from you! I have an old employer 401k sitting around and decided to open a rollover IRA account on Webull. I think I would like to stay in a traditional 401k so does that mean I have to then convert the rollover IRA to a traditional IRA or just leave it as is?
Thanks,
Daniel G
A rollover ira is a traditional ira
do we need to pay a penalty 10% when you move Rollover IRA to Roth IRA?
Hi I want to roll my 403b (from former job) to a Roth IRA. Which ones are the best what do you recommend I need help. Which one is the best Roth IRA
So the taxes on going from a 401k to a Roth is determined by what tax bracket you are in?
I been looking into moving my old 401k to somewhere and everyone talks about IRA. Now im down to how and where, so this helped out a bit.
I used Dave Ramsey's Smart Vestor Pro, to find me financial planners near me.
If I transfer the money from the rollover to roth IRA in April 2022 before the tax day, does the amount consider my 2021 income or 2022?
I retired this year, I am over 59 1/2, and I retired with a 401k holding both pre-tax and after tax (Roth) funds. I have already rolled over the pre-tax funds into a rollover traditional IRA. The Roth 401k funds are still in my employer plan and that account was opened when my former employer began offering a Roth 401k option in 2019. I have a Roth IRA which I opened in 2014 and I would like to roll the Roth 401k funds into it. My Roth IRA has been open more than 5 years, but my Roth 401k has not. Can I roll the Roth 401k funds over now or do I have to wait until 2024 when the Roth 401k account reaches the age of 5?
Would it be better to roll it over to a new employer Roth 401k/tsp or a Roth IRA?
Thanks for the video, it was very informative. Unfortunately, I am 2 months too late. I planned to switch $5,000 from my 401k to a Roth IRA and a larger amount to a traditional IRA. Somehow I got the two accounts switched, the larger amount went to my Roth IRA instead. I still have enough left over in my 401 k to make up the difference for the tax. Am I in “Deep Doo Doo” or will I be ok? Does anybody know?
Question: when you roll over a Roth 401k to a Roth IRA, how is that money treated for early withdrawals? Are Roth 401k contributions and earnings tracked and turn into Roth IRA contributions and earnings? Is all of the Roth considered contributions after that? Does it count as a conversion with a 5-year ‘seasoning’ period? (Assuming all accounts have been open for 5+ years for this)
@@kokaa7344 yeah for the Roth portion it’s up to you to keep track of contributions and earning, they stay separate and get added to your Roth IRA contributions and earnings. If you want to roll over your entire mixed account into a Roth IRA, you will have to pay taxes on the traditional portion. But in one transaction you can put all of your Roth money into Roth IRA (keeping track of how much of that is contributions) and you can put all of your traditional money in a traditional IRA and pay no taxes right now
You get a 1099R. Careful when you calculate the taxes, as this is not easy. I had to really dig to get Turbo Tax to do this right using the search feature. You have to count all your IRA money when calculating the tax.
My tax software "TaxAct" was useless when trying to figure this out.
If you are new to this, filling out the tax forms yourself or having a CPA to walk you through it is worth the effort.
How much can you convert from Roller IRA to Roth IRA? Or its up to you and you just got to pay the taxes?
Thank you thank you thank you! This was really helpful. I am leaving a job and going back to school (where I will have a much lower income). Seems like it would be best to rollover my traditional 401k into a rollover IRA, then when I am in school in a lower tax bracket, move the money from the rollover IRA to a Roth IRA?
Good observation and this could make a lot of sense for you to do. Taxable situation, but low taxes due to being in a low tax bracket while taking classes.
That would be the best scenario in your situation
I just started with a 401k currently have 2k in my 401k should I transfer it to an ira at this time
ive been talking about rolling everthing over im glad i didnt.
Ok let me see if I understand this I have 50k in my rollover and 1k in my Roth I’m 62. If I want to transfer funds from the rollover to the Roth I have to pay the taxes on what I transfer over and which of the two should I contribute to on a regular im sure I’m not asking the right question but I’ll give it a shot . I’m in a new job making a bit more than my prior, 62 , not retiring anytime soon, single , no assets live with partner and not contributing to my jobs 401 because of no match also not sure if that was the right thing to do. And how do you I leave my current advisor if I decide to let your firm manage my money? Sorry so many questions I’m just really trying to understand all of this
Question: In 2020, I did a 401K conversion to a Roth IRA. I understand I need to pay taxes on the amount I moved over. I also did a backdoor ROTH IRA as well for $6K. My question is, do I pay taxes only on the 401K conversion to Roth IRA or do I need to pay taxes on both the 401K conversion as well as the backdoor ROTH IRA.
If you did the backdoor Roth correctly, you already paid taxes on the $6000 when you added it to an IRA account, so no additional tax is due on the conversion. You'd only owe taxes on any gains while in the IRA.
if not converting all, should you mention paying taxes on earnings pre conversion? what tax forms would be involved in all of this shuffling?
If you do a direct transter to your new custodian taxes are not withheld.
Rolling over a 401k to an ira, you should recieve 1099R, but its not taxable.
When you roll over from the ira to a roth, the brokerage will give you a 1099-r form to report the taxes.
If you do an in plan roll over, they don't withhold taxes and you get a 1099r that you have to file.
Roll overs can be tricky if you have both pre-tax and after tax items in any of your IRAs. Not just the one you are rolling over. A complex case may warrent a CPA to help you figure it out.
OK that was clear as mud. That did not help.If I am over 59 1/2 you’re saying I can’t use the money that’s in the 401(k) to pay the taxes without a penalty?
What about backdoor IRA to Roth ?
Just the video i was looking for! Quick question though, once u roll over your roth 401k funds to your new roth IRA does that money count as part of your limited 6k annual contributions or can u add an additional 6k for that current year?
If you go (401k > ira > roth ira [you still pay taxes here]) or if you go (401k> roth ira[you also pay taxes here]). Is there an advantage to either method as they'll both end up in the roth.
Good question. I wonder the same thing too.
Your 401k is a tax deferred, traditional IRA can also be a tax deferred means you do not have to pay tax while it's in that account, but once you convert it over to a Roth IRA, that's when you pay the tax. If if you are not ready to pay the tax yet or you don't have thr money to pay the tax for the conversion yet then you can just leave it in the traditional IRA until you have the money to pay for that conversion. The tax amount is based on your tax bracket. So if you are at a10% bracket, you pay 10%, if you are at 25%, you pay 25% of the amount you convert.
I don’t see why you have to move money to a Rollover IRA first before moving it to Roth. You’ll be liable to pay taxes on the same dollar amount. And the form you will get from your brokerage would specify exactly how much money you moved. Am I missing something?
Saibu Shayer I think if you roll directly to the Roth you’re converting all at once. Rolling to a rollover gives you the option to not have to convert it all at once.
@@ryanmorris4995 Thanks for reply, but I've had people roll portions of 401k directly rolled in Roth before.
This is good info. I'm just missing the part where if you convert a certain amount like $6,500 from the Rollover IRA to the Roth IRA, and there's still a balance of $15,000 in the Rollover IRA what taxes/fees apply?
You pay taxes only on the amount you rolled over.
Using the two step process 401k Trad ->IRA Trad->Roth IRA. Won’t it trigger a Pro Rata Rule on existing pooled Trad IRA?
For several years I contributed to a Traditional IRA, but I wasn't able to deduct the contributions from my taxes because my household income exceeded the AGI limits to qualify for the deduction. So I already paid income taxes on a substantial part of those Traditional IRA contributions. If I now roll the Trad IRA to a Roth IRA, would I be taxed on those contributions once again?
You would not since you contributed already taxed dollars into the traditional IRA.
How can you take your 401(k) into a rollover IRA and then convert it to a Roth IRA if you have already maxed out your annual Roth limitations? Does this conversion to Roth not count towards your annual Roth limits?
No it doesn’t count towards Roth’s annual contribution. You can rollover your 401k and still max out your 6000$ Roth IRA
Thank you so much. When i convert from RolloverIRA to Roth , Do i owe taxes immediately or do i pay taxes when i do the tax filings ?
When you file. Could owe quarterly payments to the irs if it’s a large amount though
Is the direct rollover considered a disbursement? doesn't the IRA company withhold 20% for tax anyways?
Are asking about rolling a traditional 401(k) to a traditional IRA?
Does this count as part of the 6k per maximum contribution? My guess is no but I feel like I should ask.
Converting a 401(k) to a Roth IRA does not count toward your annual $6,000 IRA contribution.
can you roll over a 401 to a Roth at any age ? I know I have to pay the taxes
What a video! Exactly what I was searching for. I'm in the process of rolling over my 401k to a traditional IRA and I had no idea I would get 2 checks, since I have 401k, and 401k Roth. So does this mean I'll have 2 accounts for each? When I make contributions, how would the money be distributed?
You really don't want to receive a check(s) in the mail. Has this process already been completed?
@@alrocky the withdrawl approval has been made already. They're in the process of sending the money.
@@renedperez Ok you want to make sure you deposit those checks (in the traditional/Roth IRAs) ASAP otherwise you will pay a distribution *tax* and or penalty.
@@alrocky my financial advisor is going to let me know where to send the checks once I receive them. Thanks for your assistance! Greatly appreciated.
Why would anyone bother converting a Roth 401(k) to a Roth IRA? The only benefit I see is perhaps having different investment options than what is offered under the 401(k) plan.
Here is one reason I am considering it: I ran out of money in a 529 for my kids college. Had I opened a Roth IRA 5 years ago I could start using it today to directly pay for tuition without penalty. This isn't allowed with the Roth 401(k). I really wish I realized school with no scholarships would be this much 5 years ago. Even so, I am considering doing it and taking both the tax hit and 10% penalty, versus being stuck with $100k+ in student loan debts as a parent.
Ok. I have 2 old 401k's. 1 403b with around $1,500 and a 401k with much more. I know I can but "SHOULD I" roll them into a Roth or into my new 401k?
*_Converting_* traditional 403(b) and traditional 401(k) to Roth IRA is a taxable event. Default choice is to roll the old retirement plans to traditional IRA. If you have good investment choices and low fees in your current 401(k) it's okay to move old plan to new plan.
So with a 2500 401k I could just skip the rollover ira and go straight to a Roth cause the amount being taxed isn’t enough to matter
What if you are being told that you can't keep your 401K because you are no longer employed by previous employer and you have to transfer your full amount at once?
Either move old 401(k) to new 401(k) at current job or most likely better to IRA.
Great video! I have a traditional 401k from my old job. I’ve been meaning to convert it to a Roth IRA, but I’ve just been so intimidated by the taxes.
What is the benefit of converting the traditional 401k to a rollover IRA if I’m going to get taxed just the same as converting from traditional 401k to Roth IRA? Sorry if I missed something. Thanks!
Moved my 401k to a Traditional Roth plan with Charles Scwab. Then I unfortunately took out 210k out of that plan without paying taxes, now I owe a total of 280k to the IRS and State altogether. 🤦🏻♂️
Plus you have a 10% penalty if you took it out before your retirement age.
Do you mean into traditional IRA?
My employer offers post tax 401k. Would I able to convert that straight to Roth IRA and not pay any taxes on my earnings later?
Abid Rahman don’t we all want that?
Yes, as the taxes were already paid
After rolling over 401k to traditional Ira, then can you transfer part of that money to Roth IRA? And is there a waiting period?
Q1 Yes
Q2 No
Isn't there a contribution limit in the Roth IRA? Wouldn't the money going from the traditional IRA to the Roth IRA have to be limited by your contribution limit?
Thanks!
Q1 Yes
Q2 No
*_Contribution_* limit is $6,000 while *_conversion_* from traditional IRA to Roth IRA has *no* limit.
That's what I'm thinking, but nobody says anything about it. So if you are already funding your own Roth, then can you still roll it over in the same year?
Within the last 6 months or so I didn’t know what I was doing and I rolled over a traditional 401k from a short term job($10,000) to a rollover IRA and then moved that money into a Roth IRA(did not pay any taxes at the time) I have since contributed about $2000 after tax dollars from my paychecks to this ROTH IRA. When tax season rolls around will my my brokerage firm give me a form to pay taxes on that $10,000 from my 401k? Will I end up having to pay taxes on the $2000 after-tax I put in since then. So I have both pre-tax and post-tax money sitting in the same IRA. Im young and messed up and before these accounts grow anymore I want to get this all squared away. Any help please? Thank you.
"Will I end up having to pay taxes on the $2000 after-tax I put in since then." *No.* You owe tax on the $10,000.
The younger you are, the more advantageous a Roth is. The biggest drawback to the Roth is the relatively small annual contributions you can make.
I just rollover my 401k to IRA. So when is the best time to convert or long I can convert to Roth?
The best time is when your income is lower, so the tax rate is lower.
@@Wuyifrom Lol.. I guess the time is now.
Can i lump sum 6k into a roth ira for tax year 2019 if ive ALREADY filled my taxes? Can i lump sum 6k max to an IRA for tax year 2019 if ive already filled my taxes and write off in 2020?
Q1 You have until April 15 2020 to contribute $6,000 to your 2019 Roth IRA and can do so after you file your 2019 taxes.
Q2 You have until April 15 2020 to contribute $6,000 to your 2019 traditional IRA and you can do so after you file your 2019 taxes but you need to amend your 2019 taxes so you can write it off.
Short and consise
If I roll over 230.000. How many % taxes do I needs to pay ..?
You want to convert $230,000 of traditional money to Roth money?
Is a transfer better?? So, a conversion is a transfer, but has to be worded c o n v e r s I o n. And the taxes paid are worth it? I thought about taking it out pay, all penalties just to get it out of the administration's binoculars.
If you rollover a Roth 401K to a Roth IRA, will you be able to withdraw your contributions immediately?
So how would ROTH IRA Conversion work to minimize taxes every year until I start drawing SS:
1) single 62yo
2) no income (will be retired)
3) no Social Security yet - waiting until 65+ or maybe even 70
4) living off of regular savings
If I were in your shoes at the moment, I would consider that IRA where your money is sitting, will require you to start drawing at age 70+/- and say you aren’t prepared to use that cash because you have other methods income source to live by, and you do not want to pay tax more than once on those tax differed money, you can move those to Roth and allow tax free growth. Does that make sense?
Sweet I was just wondering about doing this! I only have a couple thousand so not to bad. Being a stay at home mom now I just haven't moved the money.
Ok so I got A 403b with 50,00 (invested in something my employer picked which is a 3.66 rate of return) and I want to get into dividends so I want to know if I can sell what my company has chosen for me and move it to a roth ira and buy the dividend stocks I want. I am so fricken confused. But if I do this either way I will have to pay a hefty tax I assume.
also sorry if I sound like a dummy
Anytime you have to pay taxes, it's a horror story.
Well, last year, you absolutely could with 0 penalties.
I rolled over my entire TSP account, when I retired to a TD Ameritrade account, then half to a Knights of Columbus annuity that guaranteed 3% interest on the money, which I am withdrawing 10 K per year and I have all the taxes paid as I take it out and just enough NOT to put me into a higher tax bracket and I am gifting that money to my daughters. They then do not have to count as income! The other half i put into my own, precious metals LLC IRA and I am following all the required rules and laws concerning this IRA. I would like to know how to convert this IRA into personal metals and quit the LLC. Am I going to have to pay taxes on the initial purchase price of the metals or am I going to have pay capital gains tax also when I take it out and convert to personal metals? Or is there a better way to pay less taxes?
Your hair reminds me of Theres Something About Mary... lol
😂😂
You can rollover a 401k to a Roth IRA without the two step process since 2008.
Can you roll a IRA into a 401k?