Dollars and Cents: Does 401k Rollover Affect Roth IRA Contrbutions?

It’s time for another edition of Dollar and Cents. This is where I answer one of your questions.

If you have a question, either use the contact form on the blog or use my Facebook Fanpage.

This week question brings up something I’m semi-obsessed with – the Roth IRA!

If you rollover a 401k into an IRA is this amount subtracted from what you are able to contribute that year? So if I rollover my 401k next year if I leave my current employer, will I still be able to contribute to my IRA as usual up to the limit or will the rollover affect this?

Resources:

With each Dollars and Cents video we want to provide some follow up links where you can get some additional information on the topic. If you are interested in learning about doing a 401k rollover into a Roth IRA, check out these reads:

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Comments | 4 Responses

  1. says

    Good answer to a question that comes up a lot in my tax office. I also like using the Rollover as a Roth conversion whenever it is practical. Being a tax guy, I have to look at the other things going on on that year’s tax return before a final decision.

  2. says

    Yes, anybody is able to take all their traditional IRA’s and old retirement plans and convert them to a Roth IRA. The amount you convert will be taxed, but it still can be an attractive move for those that feel that the deductions are going nowhere but up.

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