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How to Move from IRA to Roth?

#11
I'm going to be indiscreet.  I'm 71 and last time I tried to do my annual conversion online I had to take my RMDs first ( wife also ).
Since I never ask a lady her age this could be the reason.  Call your brokerage company and ask them.  In my case ( and wife ) that was the problem.  Once we took our complete RMDs from our IRAs that problem went away and we could convert to our hearts content.
Once you turn 70 this problem will be there every year until you are out of IRA funds.
Hope this helps
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#12
It is the same as if you sold whatever you held in the traditional IRA, moved the cash, and then bought the same thing back in the Roth. The only difference is that if you move the asset rather than cash, then you do not have the transaction costs.

That said, in my opinion, whatever you expect to grow the most over time should be held in the Roth rather than in the traditional IRA. So, that might argue that you should move - for example - equities rather than fixed income, or that you should move something that is currently beaten down and that you think is likely to recover. If you move something that is beaten down, you can move more of it for the same tax cost. (Of course, no one really knows the future and your assumptions may be wrong.)
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#13
I have a variant of the same question and searched here before starting a new question. I have $750,000. in an IRA holding a CD that is $200,000., 200+ shares of FFIN, a small Texas bank, and $440,000 in an S&P 500 Index Fund. It was FUSVX before Fidelity moved it to new equivalent fund. I am still eligible to participate in a company 401k plan so I don't think I can contribute to the IRA separately. I might be wrong about that. But I contributed $4000. to the 401K in Jan and Feb and then stopped. I've been pouring money instead (this year) into my taxable account. My real question is: Is Tax Deferred better than paying current taxes?

We've been sold on the idea for decades that our taxes will be lower in retirement than they are today. But I ain't buying it. Right now, we have the lowest income tax rates we've had in 50 years. And facts are stacking up against tax payers I think. Unfunded liabilities of the government; SS and Medicare that they cannot cover. I'm reminded of a bumper sticker I saw "I love my country but I don't trust my government". Taxes are going to be higher my friends. Or we're only going to get about half the SS & healthcare we thought we'd get. I don't like either scenario but everything coming out of Tax Deferred accounts is going to be taxed at ordinary income rates, not cap gains rates. It's true, and in fact likely, that the legislature will increase the cap gains rate to match whatever ordinary income rates might be in the future. But right now is all we got to work with.

ARE TAX DEFERRED accounts really the bargain they've been sold to as being? We have a business partner in those accounts and it's the Treasury Department. The % of their ownership in those deals can change, and we won't even have a vote in the matter.
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#14
I would use the 401k as a funnel to Roth conversions. In either the Roth conversion or taxable account cases you pay taxes now at ordinary income tax rates. In the future, there are no further taxes on the Roth account, but taxes on dividends, interest and cap gains in the taxable account. The taxes also affect investment decisions within the taxable account because investors are reluctant to incur a taxable event by selling an appreciated holding. A taxable account would be my last choice.
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#15
(12-11-2020, 11:56 AM)admin Wrote: I would use the 401k as a funnel to Roth conversions. In either the Roth conversion or taxable account cases you pay taxes now at ordinary income tax rates. In the future, there are no further taxes on the Roth account, but taxes on dividends, interest and cap gains in the taxable account. The taxes also affect investment decisions within the taxable account because investors are reluctant to incur a taxable event by selling an appreciated holding. A taxable account would be my last choice.

I believe 401(k)s are governed by ERISA (Federal Employee Retirement Income Security Act).  Always check the 401k contribution limits, because they usually change each year. That is why they are protected for any claims by creditors, lawsuits, bankruptcy, ... basically everything except QDROs (Qualified Domestic Relationship Orders = Divorce) while IRAs have no Federal protections. I believe that ERISA requires that any withdrawals or transfers from 401(k)s and 403(b)s be done as cash.  That is what I have been told but I don't know if it is true or not. 
What 401(k) custodians allow is governed by their plan documents.  While many may allow multiple personal withdrawals, many will attach fees or other costs for each withdrawal.    In terms of rollovers, most probably only allow one rollover out of the account.  You would need to check the custodian's 401`(k) Plan Documents to see what they will allow.  The key is to check your 401(k)'s plan documents. 
 
If you want to do partial Roth conversions, I believe your first step would be to transfer from your 401(k) to a T-IRA.  If  you have any after-tax 401(k) contributions or Roth 401(k) contributions, you can have the custodian push those directly into a Roth IRA.  There are no tax consequences to moving after-tax 401(k) contributions or Roth 401(k) contributions and Roth 401(k) earnings to a Roth IRA.  Likewise, there are no tax consequences to moving untaxed 401(k) contributions and untaxed earnings to a Traditional IRA.

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