Backdoor Roth contributions are legal but the pro-rata rule taxes the conversion if you still hold a traditional IRA

Popularity Index: 8 Updated at 2026-10-23 08:22 UTC

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Changing jobs mid-year can leave you running two 401(k) accounts and paying two sets of recordkeeping fees A traditional IRA deduction phases out once you have a workplace plan and cross the income threshold A SIMPLE IRA has a lower contribution ceiling and requires either a match or a nonelective employer contribution A solo 401(k) stacks employee deferrals and employer profit sharing on the same self-employment income The IRA limit is per person so a spouse with no earned income needs a spousal IRA to contribute at all The 60-day rollover window is the only chance to move money between accounts with no tax and no penalty An inherited IRA must be emptied within ten years and annual withdrawals are still required in most cases A Roth conversion is taxed at today's marginal rate in exchange for tax-free withdrawals later A 401(k) loan is repaid with after-tax dollars into an account that will be taxed again on withdrawal Required minimum distributions now begin at 73 and a Roth 401(k) no longer forces them at all

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