401a
Hello – 1) I have a 401a held in a retirement account (previous govt. employer). In Ed’s newest book (Timebomb) pages 63+64, it does not list this one. What can I safely roll it into?
Also, 2) when trying to decide to do a conversion, at what point does it not make sense to do any, and just take the tax hit, eventually? I ask because I’m not able to do very much converting at this point, year to year, without throwing me into the next tax bracket. Any rules of thumb you can offer?
Thanks.
Permalink Submitted by Alan - IRA critic on Tue, 2021-04-06 00:01
You can roll it into the same types of plans that a 401k could be rolled to, including an IRA. It is a qualified employer plan. As for conversions, they are generally beneficial if you can convert in a lower tax bracket, or in some cases in the same tax bracket that you will pay in retirement. If your conversions fall into the next higher bracket, they generally would not be to your advantage unless you expected your future taxable income to also penetrate the higher bracket. You might factor in IRMAA surcharges as if they were added income taxes.