Can you convert/rollover a Traditional IRA to a 401K???

Question

I have a Traditional IRA that I don't contribute to because I have a ROTH that is funded annually. I am 23, what should I do with the Traditional IRA with such little funds??? Suggestions please...

Answer 1

You could possibly, but why would you? Going from a traditional IRA to a 401K restricts you further and who would want to do that!

Keep the tradiitional IRA and invest in it like you might in a 401K. The difference is you can make a lot more managing it yourself.

For example, in your 401K, you probably had to choose mutual funds. Mutual funds are actually not a very good investment (see my answers on this in other answers).

In fact, they're downright awful overall since well over half of them can't even keep up with the market! Add on the management fees and the low liquidity and it just gets worse and worse.

So what do you do instead? Any mutual fund that you were considering now has an equivalent ETF (Exchange traded fund). These trade just like stocks, have liquidity like stocks and you can move in/out of them much more easily.

So say you bought the QQQQ's (the nasdaq 100) index. You now manage your own mutual fund! ;-)

Anyways, now you're performing equal to the market.

Get an education (see 888options.com for starters) and learn how to write covered calls. Once you learn that, you can sell covered calls on your ETF's and earn an extra 1-2% a month (most of my friends earn more than that).

Compound that across 40 years and you're going to have a nice retirement!

Anyways, it's food for thought. Keep control. Keep your roth and your traditional IRA. And if by chance you have a broker that won't let you do what I said above, fire them and get a real broker.

Let me know if you have any questions!

Answer 2

No, unless it is a non-contributory IRA. If the money originally came from a 401(k) or equivalent, and you rolled it over into an IRA, they should have made it a non-contributory IRA which are designed for such a purpose. You can't add new money into them, but you can roll them back into a 401(k) assuming your new employer allows roll-in contributions. Some do not.

If it is, as you say, a Traditional IRA which was funded from your own funds, then no, you are currently prohibited from rolling it over into a 401(k). Laws do change, so good luck.

If you can't roll over the Trad IRA into the 401(k), you may want to just leave it where it is, or, like others have said, roll it into the Roth. The amount you roll into the Roth will be taxable income in the year you roll it in, so keep that in mind. Sounds like it won't be much. And don't let anyone tell you that there is a $100,000 income limitation. Congress repealed that limitation for 2006. Whether they reinstate it later, who knows.

Hope this helps. :)

Answer 3

Depending on your tax bracket, you may want to transfer it to your Roth IRA. You do not have to transfer it all at once but the amount that you do transfer is taxable when the transfer is made.
But after the transfer is made then all of the funds earned by that money are then tax free forever.

If you are currently in a high tax bracket such a transfer may not be such a good idea. If you are in the 15% bracket transfer just enough each year so that your adjusted gross income, if married, remains under $58,000. In my opinion it is worth paying the 15% plus state taxes to get the forever tax free earnings.

Answer 4

Convert it to a Roth. Thre will be tax consequences, but that's the way to go. OR, leave it where it is.

There's no advantage to converting it to a 401(k), and in fact it would most likely limit your investment choices. When you leave an employer you can pull the money out and put it in an IRA, but I've never heard you could go the other way...

Answer 5

either roll it over into your roth and pay the taxes on it - or just leave it alone

Answer 6

best to leave it alone

Answer 7

YOU ARE NOT ABLE TO CONVERT IT I AM SORRY.