Author Topic: Old employer 401k account  (Read 584 times)

lulu0915

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Old employer 401k account
« on: February 19, 2020, 05:52:55 PM »
Hello. I have a 401(k) at fidelity with an old employer. I am now self employed. My husband and I have a Vanguard account right now that is a ROTH IRA, but this year forward we can only do a traditional IRA because of our income. We do plan on doing a backdoor with the IRA going forward. 

Should I move the funds to VSTAX? Or keep them in FID FREEDOM 2045 K  (FSNZX) where they are now?

terran

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Re: Old employer 401k account
« Reply #1 on: February 19, 2020, 09:04:57 PM »
If you want to do a backdoor Roth then you don't want to move this 401(k) to an IRA as that would mean any traditional to Roth conversion you make will be taxable in proportion to the non-deductible IRA balance vs this rollover IRA.

The freedom K funds aren't great as they're actively managed and therefore come with higher than the Fidelity index target date funds. What other funds are available in this 401(k)? Any with the word "index" or "idx" or something similar that might indicate it's an index fund?

Since you're self employed, you might consider opening a self employed retirement plan, which you might be able to roll the old 401(k) into it without messing up your backdoor Roth plans. Do you have or plan to have any employees other than you or your spouse?

lulu0915

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Re: Old employer 401k account
« Reply #2 on: February 23, 2020, 03:51:42 PM »
Hello. thank you for your advice. I do not plan on having any other employee but myself.

These are the choices with fidelity.


lulu0915

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Re: Old employer 401k account
« Reply #3 on: February 23, 2020, 03:53:04 PM »
and one more: