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I have a Traditional 401k that I want to rollover into my new 401k which I haven't made any contributions to yet. Can I roll my traditional 401k over to my new 401k, then make Roth contributions to my new account?

I don't want to convert my traditional 401k to Roth because of the taxes I would owe. If I rolled over the traditional 401k, then made Roth contributions, would my new 401k have one section for the traditional funds and one section for the Roth funds, or how does that work?

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  • Have you confirmed that the new 401k plan allows Roth contributions? Many don’t allow that option at all. My current K allows both and commingled the funds with the traditional/roth distinction noted in the statements (x% traditional — y% roth)
    – quid
    Aug 11 '21 at 16:28
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    you can do exactly what you described. your 401k provider may have to separate accounts (one saying roth and one saying traditional) or they might lump it in all as one. If they lump it in as one, it is for display purposes only, on their end they know exactly how much is in the traditional and how much is in the roth. It is best to ask your employer, they usually have someone from HR to help with these types of questions.
    – rhavelka
    Aug 11 '21 at 16:28
  • @quid Yes, it definitely allows Roth contributions. I see the choice of which to use on the website.
    – Rich
    Aug 11 '21 at 16:30
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I have a Traditional 401k that I want to rollover into my new 401k which I haven't made any contributions to yet. Can I roll my traditional 401k over to my new 401k,

Yes, but note that 401(k) accounts are more expensive than (rollover) IRAs, so really it's better to roll into an IRA than the new 401k

then make Roth contributions to my new account?

No.

If I rolled over the traditional 401k, then made Roth contributions, would my new 401k have one section for the traditional funds and one section for the Roth funds?

Yes; you'd have two accounts (though the web site and statements might make it look like just one account) in the same plan. That's why my previous answer is "No".

To clarify: you can make Roth 401k contributions, but they would not go into your traditional 401k account; they would go into your Roth 401k account. (At the same time, you can also make traditional 401k contribs into a traditional 401k account).

EDIT: I say "two different accounts" (even in the same plan) because the pre- and post-tax money must be accounted for separately, and "accounts" are the way to do that.

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    Why can't they make Roth contributions after the rollover?
    – D Stanley
    Aug 11 '21 at 16:41
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    OK I see what you meant. For what it's worth, I only have one 401(k) account but my pre-tax and post-tax (roth) contributions are accounted for separately, so maybe it's a semantic issue or some providers actually use separate accounts.
    – D Stanley
    Aug 11 '21 at 17:12
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    You definitely don’t, I have a single 401k at Fidelity which houses both my traditional and Roth contributions and the accounting, based on what’s reported to me, is not separate.
    – quid
    Aug 11 '21 at 17:25
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    It’s a single account. Contributions are accounted for traditional/Roth but any activity beyond that is commingled in a single account.
    – quid
    Aug 11 '21 at 17:27
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    I've also had roth + traditional contributions to 401(k)s at both fidelity and vanguard, and neither ever showed it as being multiple accounts. They were listed as separate contribution sources but if they're separate accounts under the covers, that was never exposed to the customer.
    – Cody
    Aug 11 '21 at 20:20

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