401K to Roth-IRA

My goal is to move post-tax contributions from my professional corporation’s profit sharing plan to a Roth-Ira without incurring any tax liability. My strategy is as follows: (1) Rollover the entire plan balance into a new Traditional IRA, (2) Roll just the pre-tax IRA amount back into the plan, (3) Convert the amount left in the IRA (basis)to a new Roth-IRA. I am 69 years old, and my plan allows incoming IRA rollovers and in service plan distributions. Would this work? Also, I presently have a single traditional IRA account (no basis). Would after step #2 above be the correct time to roll that IRA into the plan? Thank You.



  • Yes, you could proceed with this plan and should include your entire pre tax IRA balance including the existing IRA balance into step 2. Your conversion would then be tax free. You might also check if your plan allows you to distribute ONLY your after tax contributions if held in an after tax “sub account” directly to your Roth IRA. If so, the entire process could be reduced to one step.
  • You also should incorporate some RMD planning into the process since it appears you might reach 70.5 next year. If you roll your pre tax IRA balance into the plan and if you are not a 5%  owner, that would eliminate your IRA RMDs until after you retire. If you proceed with this, it would be incorporated into one of the steps in your proposed strategy. You could do this whether regardless of which method you use to position yourself for the tax free conversion.


Add new comment

Log in or register to post comments