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To Move IRA -> 401K-i or Not To Move? ...
Old 10-22-2013, 11:11 AM   #1
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To Move IRA -> 401K-i or Not To Move? ...

... this is the question!

I have majority of my tax deferred funds in Vanguard IRAs (~650K).

I would like to take advantage of possibility to save into after-tax IRA with immediate convert to roth-IRA.

My understating is that in my situation I will be liable for pro-rate tax from my total IRA accounts amount.

If I had tax deferred funds in 401-K type accounts instead I would not have this limitation.

Now, Vanguard has 401K-i accounts, but they do not allow roll-over to them from IRAs (why, who knows?! ).

An options I have is to open 410K-i accounts at Fidelity and then roll-over all tax deferred funds from IRAs to Fidelity (unlike Vanguard, Fidelity allows incoming roll-overs from IRAs ).

I am looking for someone who has gone this route and and any feedback/suggestions on the subject.

Thx!
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Old 10-25-2013, 07:01 PM   #2
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No one has moved IRA to i-401k Fidelity?!

Please share your point if you don't believe in this way!
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Old 10-25-2013, 07:40 PM   #3
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I understand the concept your referring to but what is a 401k-i?? Never heard of it. Are you talking about a solo 401k?
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Old 10-25-2013, 07:43 PM   #4
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its 'individual 401k same as solo as I understand.
have you done this?
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Old 10-25-2013, 07:54 PM   #5
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Can a 401k of any type accept a rollover that isn't from another 401k? I thought you had to be able to show that the IRA was a rollover from a previous 401k. Or maybe the rules changed. I know many 401k plans won't accept roll into at all.
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Old 10-25-2013, 08:01 PM   #6
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most employer-sponsored 401k accept rollover iras but not all. I plan to do the same thing before the end of this year to get the free roth conversion for 2013. As far as I know solo 401ks are for one-owner, one employee businesses so I think you'd have to fit that qualification. Beyond that I couldn't tell you if there's some special rule that would prevent you from opening a solo 401k and moving rollover ira into it. I think that would be an easy google though... or an irs.gov search maybe.
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Old 10-25-2013, 08:04 PM   #7
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Wannabe,
I'm not quite understanding your question.
Issue 1: Is all your present IRA money pre-tax? If so, then for that money there's no reason not to directly convert it to a Roth IRA if you want. No need to go through a solo 401K.
Issue 2: Do you have self-employed income that would allow you to establish a Solo 401K? If not, then I think this option is closed to you. If you do have such income, is there some reason your contributions to that account would be after-tax?
Issue 3: After you close out your Solo 401K (e.g you've shut down the business, etc), you can roll those funds over to a Roth IRA if you's like. At that point you'd have to pay tax on the funds.
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Old 10-25-2013, 08:10 PM   #8
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If I understand wannabe correctly, he/she makes too much money to fund a roth ira for 2013 but wants to do the backdoor roth... immediate conversion of a Traditional ira to a roth ira. but this only works if you don't have any other pre-tax iras that mess up the tax equation... do I understand the issue?
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Old 10-25-2013, 08:20 PM   #9
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A quick online search leads me to believe that you would have no problem moving a rollover ira into a solo 401k, as long as you are a qualifying business owner and the plan document allows it... because the solo is a qualified retirement plan, just like a traditional 401k.
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Old 10-25-2013, 10:58 PM   #10
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Quote:
Originally Posted by panacea View Post
If I understand wannabe correctly, he/she makes too much money to fund a roth ira for 2013 but wants to do the backdoor roth... immediate conversion of a Traditional ira to a roth ira. but this only works if you don't have any other pre-tax iras that mess up the tax equation... do I understand the issue?
That is exactly how I read his situation and I fully understand why he wants to create an i401k and move his existing pre-tax IRA into it.

As Sam says, the first question is whether he is eligible to open a solo 401k.
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Old 10-28-2013, 09:58 PM   #11
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Quote:
Originally Posted by panacea View Post
If I understand wannabe correctly, he/she makes too much money to fund a roth ira for 2013 but wants to do the backdoor roth... immediate conversion of a Traditional ira to a roth ira. but this only works if you don't have any other pre-tax iras that mess up the tax equation... do I understand the issue?
Yes, exactly !
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Old 10-28-2013, 09:59 PM   #12
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A quick online search leads me to believe that you would have no problem moving a rollover ira into a solo 401k, as long as you are a qualifying business owner and the plan document allows it... because the solo is a qualified retirement plan, just like a traditional 401k.
Not true, fir example Vanguard does not allow this rollover
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Old 10-28-2013, 10:00 PM   #13
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That is exactly how I read his situation and I fully understand why he wants to create an i401k and move his existing pre-tax IRA into it. As Sam says, the first question is whether he is eligible to open a solo 401k.
Well, I do have income from 1099, so assuming I could, yes?
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