My previous employer and current employer offer both a Traditional 401k and a Roth 401K. I have about $9500 in my Traditional and $14,000 in my Roth 401K at my previous employer that I’m looking to rollover. At my current employer, I have selected only Roth 401K, but can modify it at any time. My current employer has low expense ratio index fund options. From reading other posts in this community blog, I have decided to do the following:
- Rollover the $9500 in my Traditional 401k to a new Traditional IRA account.
- Rollover the $14,000 in my Roth 401K to my current employer Roth 401k.
My husband and I are ineligible for a Roth IRA account since we are married and filing separately and our MAGI is greater than $10,000. We plan to use the backdoor Roth IRA option moving forward.
My questions are:
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Does anyone have any input as to whether or not the above rollover strategy is the best option? That’s what I gathered from reading other posts but want to confirm.
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Since we plan to use the backdoor Roth IRA in the future, will the pro-rata rule kick in since we would have $9,500 in the Traditional IRA (rollover from the Traditional 401K)? If so, would it be better to just rollover the Traditional 401k amount from my previous employer to my current employer Traditional 401K versus into a Traditional IRA?
Any input would be greatly appreciated 