I have both a traditional 401k with my employer and a traditional IRA I opened a few years ago. I opened the IRA since I didn't yet realize you could submit after-tax dollars to a 401k.

Is there an incentive for me to move the IRA money into my 401k as an after-tax contribution?

  • 2
    Traditional IRA? Isn’t it pre-tax? Jan 1, 2021 at 22:39
  • @ChrisWRea I see that you added the united-states tag to a question which already has the 401k and ira tags. Are there other countries with 401k and ira accounts?
    – RonJohn
    Jan 2, 2021 at 0:44
  • 3
    @RonJohn Is it incorrect to use applicable tags even if other tags imply them? Tags are for, among other things, assisting in search. Seems helpful to include US here even if implied by 401k.
    – Matt
    Jan 2, 2021 at 2:38
  • @Matt incorrect? Hardly! I was just curious.
    – RonJohn
    Jan 2, 2021 at 2:39
  • 1
    Only pre-tax money can be rolled over from Traditional IRA to Traditional 401k, and after the rollover it would be pre-tax money in the Traditional 401k. After-tax money cannot be rolled over. And rollovers are different from contributions. Contributions are money coming in from outside of any tax-advantaged account, and are subject to annual contribution limits. Rollovers are moving money from one tax-advantaged account to another, and are not subject to contribution limits. Which are you talking about?
    – user102008
    Jan 2, 2021 at 19:05

2 Answers 2


Assuming the plan accepts rollovers, and ignoring any pre-tax vs after-tax vs Roth issues:

A 401(k) plan (or 403(b) or other similar plans) may provide access to special share classes of certain investment options (e.g. mutual funds) that have lower fees than what is available to a standard retail customer (e.g. via an IRA or regular brokerage account). This is not always the case, though, and you need to evaluate the specific investment options available in your plan to see if this applies. If you are invested in a fund in your IRA that has a cheaper class available in your 401(k), you could save some money on fees.

The plan may also offer a loan option, with certain limits such as only allowing you to borrow X% of your balance. Ignoring the question of whether such a loan is a good idea, or better/worse than just withdrawing (potentially with an early withdrawal penalty) from your IRA, rolling an IRA into your 401(k) could increase the amount you are able to borrow.


Is there an incentive for me to move the IRA money into my 401k as an after-tax contribution?

Not really. You may be confusing that with a Roth conversion.

A Roth IRA conversion is a transfer of retirement assets from a Traditional, SEP, or SIMPLE IRA into a Roth IRA, which creates a taxable event. A Roth IRA conversion can be advantageous for individuals with large traditional IRA accounts who expect their future tax bills to stay at the same level or grow at the time they plan to start withdrawing from their tax-advantaged account, as a Roth IRA allows for tax-free withdrawals of qualified distributions.

If you think your tax rate will be higher during retirement, then rolling over your (pre-tax) IRA into a (post-tax) Roth IRA might be a good idea. WARNING: that rollover is going to be considered current income, and you'll cough up a bundle in taxes. So beware, and do it in stages if -- after analysis -- you think it's worthwhile.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .