I was hoping in 2010 that I could roll my entire 401k balance over to a traditional IRA, and then from there do another rollover to a ROTH IRA.
The advantage of doing it in 2010, is that you can spread the contribution amount over multiple years (3 to be exact) to reduce the tax hit.
So for the first step.) I was wondering if I could roll over my 401K balance to a tradition IRA while I am still employed at my company where my 401k resides?
- Unfortunately I can’t! Kimberly at Kiplinger answered this one.
Why did I want do this process in 2010 instead of now or earlier?
If I were to do the conversion in an earlier year (let’s say 2009), the tax hit would be too high, because it would bump me up to a higher Marginal Tax rate (actually a few higher)… And I hate to pay more taxes that I have to.
Sad day for me… Oh well, 😐