401k Rollover options

Investing
#1

Hi @Jeremy - Big fan of yours and a regular follower of all social media channels and a blog. I recently changed jobs and have a traditional 401k with my previous employer. I need some help on how to handle the 401k with my previous employer.

For now, I see the below options -

  1. Keep it as it is and have multiple 401k accounts
  2. Rollover into new company’s traditional 401k
  3. Rollover into IRA (Trad/Roth?)

Few things to note -

  • I am not eligible for regular ROTH IRA contribution and hence do backdoor ROTH conversion every year (I believe I have to consider the pro data rule due to this)
  • I am in CA and in a high tax bracket (>24%)

Appreciate your help!

#2

@Jeremy - did you get a chance to look into my question. Thanks!

#3

Ah, usually I recommend rolling to a rollover IRA, but to avoid the pro-rata rule you probably want to keep it in 401k status. I’d either leave it where it is or roll to your current company based on the fees and investment options offered by each? i.e. if your new company offers low fee index funds, then roll it over. If your old company 401k offers lower fees, keep it where it is for now! :slight_smile: That’s what I would do!

1 Like
#4

Makes sense! Thanks a lot @Jeremy :slight_smile: