Roth IRA rollover

Your former employer might require you to take it out all at once. In this case roll it to traditional IRA, then you can convert some of it to Roth over multiple years. If you do this so as to remain out a higher tax bracket in any given year, then it will help minimize tax, otherwise no.

What you have it invested in while waiting could have a bigger impact, especially if you incur large tax-deferred gains prior to conversion.

No. The modified AGI limit is calculated without including the amount of the conversion. See IRS Pub 590.

Current taxes are just part of the issue. Are you sure that converting to Roth makes sense in the first place? As discussed in this group before, the main factor is, will you be in a higher tax bracket during the distribution phase than you are now during the contribution phase (or, will tax laws change significantly in the interim)? The moderate approach is to have some retirement money in both pre and post tax accounts. Remember, you could also take the money that you propose to use to pay tax on the conversion and invest it directly in, say, something that has different tax advantages, such as long-term capital gains income.

-Mark Bole

You can't roll your 401K into a Roth IRA, not directly anyway. You need to first roll it into a rollover IRA. So I would do that first since there is no tax consequences. Then you can think about rolling it into a Roth.

Thank you guys for the reponse. I just found out about another option individual 401k or Solo 401k. From what I read, I can use the fund in individual 401k to invest in real estate. I have a side business that is making about $10k a year, and I plan to turn my current house into investment property in a couple of years, should I rollover my 401k into an individual 401k?

Thanks!

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As a business owner you can open the individual 401(k) and transfer to it. But be careful about what you try to invest in. Even if the 401(k) rules allow real estate (I know IRA laws allow it, not sure about

JOE