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Originally Posted by MTG#10
Are there any taxes/fees/penalties for rolling over a 401k into a Roth IRA?
The company I work for is being bought out by a much larger company. They said we cant contribute to 401k until we've been with the new company for a year. They gave us an option of rolling our existing 401k's to a new Roth IRA that they will set up, then once we're eligible can roll that money back over to their 401k program. But I just opened my own Roth recently so I figured I might as well dump it into that one.
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Shouldn’t cost anything, but the basis will be kind of jacked. If you roll a 401k into a Roth the amount in the 401k will be tracked as separate basis. The basis and associated gains will be taxable. Roth contributions and gains won’t.
I don’t know for sure but I don’t think you get the additional benifits roth gets you on the 401k basis.
It’s not a huge deal and you’re sure not the only person to do it. But it certainly adds complexity and makes retirement tax planning tougher.