I retired a few months ago. I am 54, and I have a large retirement plan balance from my former j*b. I will have substantial taxable income this year because I worked full time till a few months ago, and because of a large 6-figure taxable windfall that landed in my lap about a month ago. So my tax bracket will be very high this year.
My 401K is an okay performer but its financial adviser charges me almost 1% in management fees, plus the funds in the portfolio have their own fees on top of that. The retirement plan is part 401K (“profit sharing”), and part Roth 401K.
Apart from retirement plan $ as described above, I have about 10-20 years of living expenses in after-tax non-retirement accounts, so I can afford not to touch the retirement plan $ for a while.
My state protects IRA funds from judgments, and I have a large 2MM umbrella policy, BTW.
My current plan:
(a) roll over the traditional 401K into a Schwab traditional IRA, choosing Vanguard index funds. (I’d like to keep the IRA at Schwab because all of my other $ is there, and I like the convenience of having my $ in one place.)
(b) roll over the Roth 401K into a Schwab Roth IRA, choosing Vanguard index funds.
(c) when i-Orp indicates that it makes sense (likely in future years, not this year given my high 2015 taxable income), I’d like to roll money from the Schwab traditional IRA into a Schwab Roth IRA. This would likely be a series of rollovers over the course of a decade or so, as i-Orp typically suggests, in order to keep me in a favorable tax bracket.
Any critiques from the wise ones at ER.org?
Can one roll over money from a w*rk retirement plan to a traditional IRA, and then eventually to a Roth IRA, as I am planning? Any snags you see?
Thanks so much for your help.
Mathematically challenged,
Mo Money
My 401K is an okay performer but its financial adviser charges me almost 1% in management fees, plus the funds in the portfolio have their own fees on top of that. The retirement plan is part 401K (“profit sharing”), and part Roth 401K.
Apart from retirement plan $ as described above, I have about 10-20 years of living expenses in after-tax non-retirement accounts, so I can afford not to touch the retirement plan $ for a while.
My state protects IRA funds from judgments, and I have a large 2MM umbrella policy, BTW.
My current plan:
(a) roll over the traditional 401K into a Schwab traditional IRA, choosing Vanguard index funds. (I’d like to keep the IRA at Schwab because all of my other $ is there, and I like the convenience of having my $ in one place.)
(b) roll over the Roth 401K into a Schwab Roth IRA, choosing Vanguard index funds.
(c) when i-Orp indicates that it makes sense (likely in future years, not this year given my high 2015 taxable income), I’d like to roll money from the Schwab traditional IRA into a Schwab Roth IRA. This would likely be a series of rollovers over the course of a decade or so, as i-Orp typically suggests, in order to keep me in a favorable tax bracket.
Any critiques from the wise ones at ER.org?
Can one roll over money from a w*rk retirement plan to a traditional IRA, and then eventually to a Roth IRA, as I am planning? Any snags you see?
Thanks so much for your help.
Mathematically challenged,
Mo Money
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