401k From Former Employer - What to do?

[RetireOrDieTrying]

Howdy, all. I'll preface this with the disclaimer that I'm very new to investing, and there's a lot I'm struggling to absorb. Reasearching scenarios drive me around the bend, because of SO MANY variables.

I have a tiny 401k from a former employer (about $27k today) in Fidelity. I wasn't prompted to move it when I changed jobs a couple of years ago, so I've just let it ride in a 2040 target date fund.

That former employer has been swallowed up by a much larger company, and I just received notice that they intend to fold the current 401k into the larger employer's plan on 31-May, with blackout starting 19-May. That plan looks like it'll remain with Fidelity.

This got me to thinking that if I have to go through the effort of setting up my online access and all of that hoopla, might it be time for me to roll this over? I have a 401k with my current employer in Lincoln Financial, and I have Roth IRAs with Vanguard.

A co-worker said that I might consider rolling this baby 401k amount into an IRA with Vanguard. He's unsure after that point if I have the option to pony up a little tax and convert it to Roth, or if at my age it would even make sense to do so.

Particulars:
-- ~$220k/yr income
-- 53 years old
-- Don't anticipate retirement before 70 (late start)
-- Total retirement savings today is this $27k, plus $70k in current employer 401k, $22k in Vanguard Roth IRAs, $8k in Vanguard 2040 target date market, $18k emergency fund in Ally, and $3k in TD Ameritrade from my HSA, plus $5600 in the HSA base account (so I don't pay monthly fees when it's under this number).

Because of my income I'm ineligible for annual Roth IRA, nor for deductible IRA, but I have for the past three tax periods maxed out the IRA post-tax (including >50 catch-up) and then promptly converted into Roth. I only mention this because I'm unsure if there is some kind of ceiling on Roth conversions. I don't want to prejudice my ability to continue socking away that IRA->Roth annual amount (currently $7500).

The Lincoln folks have much higher fees, so I'm a little reluctant to fold it into there, unless I'm missing something, or unless some other option isn't on the table.

With this scenario... what would you do?

[reeshau]

With this scenario:

$220k current income
a late start (I assume you are projecting much less than $220k in retirement income)
doing backdoor Roth's each year
Current 401k more expensive than fractional

I'd let it roll over with the larger company at Fidelity.  You should not need to change your Fidelity login:  I still see former companies' plans in my Fidelity menu, even though they are long gone.

If you rolled it into an IRA, you would be subject to pro-rata taxes on your future backdoor Roths.  (You are taxed on the basis of all open IRA's, not just the one you are after-tax, and looking to roll over) 401k's don't count for this.

Roths are expensive at your income level, but could make sense as "tax diversification" and so that you aren't subject to larger  RMD's, since you plan to retire so late.

You could roll it over to a Roth after you convert to an IRA, but then you pay taxes at your marginal rate.  It's small enough compared to your income that maybe that's just an annoyance, given that you are doing annual backdoor Roths, anyway.  But it is not really optimal.

[Telecaster]

Because of my income I'm ineligible for annual Roth IRA, nor for deductible IRA, but I have for the past three tax periods maxed out the IRA post-tax (including >50 catch-up) and then promptly converted into Roth. I only mention this because I'm unsure if there is some kind of ceiling on Roth conversions. I don't want to prejudice my ability to continue socking away that IRA->Roth annual amount (currently $7500).

To reiterate what @reeshau said, you want to keep your traditional IRA balance at zero, otherwise you are subject to the pro-rata rules which make the backdoor Roth conversion complicated.  So I don't see an advantage to rolling it over from Fidelity. 

[Dee18]

Reeshau and Telecaster are so right!  I listened to a Fidelity advisor and rolled over my 403(b) to an IRA.  I had been at the job 7 years so it was substantial.  Only later did I realize what a mistake it was.  Also the employer 401(k) often had even lower expenses for a fund than a Fidelity IRA.

[RetireOrDieTrying]

Thanks, y'all! I'll let it ride.