I have 4 accounts:

  • Vanguard traditional IRA with ~$90k in it

  • Vanguard Roth IRA ~$25k in it

  • Vanguard 401k from a former employer that has ~$40k in it

  • Mass Mutual 401k from current employer that has ~30k in it

I’ve already contributed $5,500 to the Roth IRA for 2017, but due to some unexpectedly large bonuses at work, I am over the income limit for directly contributing to a Roth.

What’s the best way for me to keep that $5,500 as a Roth contribution and also allow myself to make future Roth IRA contributions?

What I was thinking is:

  1. Roll my Vanguard traditional IRA into my current 401k

  2. Call Vanguard and recharacterize my 2017 Roth contributions as post-tax non-deductible traditional IRA contributions

  3. Backdoor convert that traditional IRA into the Roth IRA

Is this possible? I know you can’t co-mingle pre and post-tax traditional IRA contributions and then backdoor Roth without a tax penalty, but will draining that account by rolling it into my 401k before recharacterizing the current year’s Roth contribution avoid that?

  • 1
    Can you max-out your 401(k) so you're below the Roth contribution threshold? Commented Oct 23, 2017 at 20:20
  • 1
    @DavidEhrmann Already done fortunately/unfortunately :)
    – MDMarra
    Commented Oct 24, 2017 at 13:47

1 Answer 1


Yes, this is the textbook way to avoid pro rata taxes when doing a backdoor Roth IRA. I will note that you could technically even reverse steps 1 and 2/3, as taxes on an IRA conversion are determined by your IRA balances on December 31 of that year (see Form 8606 - Nondeductible IRAs for details). And the sooner you do the conversion, the less gains there will be to pay regular income tax on. Just be sure you finish the IRA->401(k) roll-in by the end of the year.

Another thing to consider. It may be possible to roll-in your IRA balance into your old Vanguard 401(k) instead of your current Mass Mutual 401(k). In general, the former will have lower fees and better fund choices.

  • 1
    That 12/31 effective date is super important. You can mix before-tax and after-tax money all you want until then. Conversely, if you only notice the problem after January 1 (as I once did), things get a lot more complicated. :(
    – dg99
    Commented Oct 24, 2017 at 16:24
  • "I will note that you could technically even reverse steps 1 and 2/3" I think there will be issues if you do step 3 before 1, because rollovers from Traditional IRA to 401(k) can only contain pre-tax amounts. If your conversion from Traditional IRA to Roth IRA contained some pre-tax and some after-tax amounts, according to the pro-rata rule, then that will subtract from the pre-tax amount in the Traditional IRA that you can rollover to 401(k). So if you try to rollover to 401(k) what you thought was the whole pre-tax amount, that will be an illegal rollover.
    – user102008
    Commented Oct 31, 2017 at 21:07
  • However, I think step 2 should be done before step 1, ideally, because if there are earnings in the Roth-recharacterized-as-Traditional IRA, they would be pre-tax and should be rolled over into 401(k) too to avoid any taxes in the conversion.
    – user102008
    Commented Oct 31, 2017 at 21:09
  • @user102008 By "steps 2/3" I meant to convey that this pair of steps has to be done in that order. So no, you couldn't do step 3 then 1, but you could do steps 2, 3, then 1, in addition to 1, 2, then 3. And I agree, the 2, 3, 1 order is preferable, as long as one is sure they will get the IRA->401(k) roll-in done before the end of the year.
    – Craig W
    Commented Oct 31, 2017 at 22:52
  • @CraigW: I was saying that I am not sure about 2, 3, 1, because it depends on how the rule about only pre-tax amounts being able to be rolled into 401(k) works. When is the amount of pre-tax money available to roll over determined? If the conversion immediately changes the amount of pre-tax/post-tax in the Traditional IRA, and if the determination for the rollover to 401(k) is made after that, then it wouldn't work because the conversion would have already decreased the amount of pre-tax money in the Traditional IRA.
    – user102008
    Commented Oct 31, 2017 at 23:08

You must log in to answer this question.

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