Hello community,
I currently have a traditional 401k and a Roth IRA which I fund via backdoor conversions. Since all the contributions for the Roth IRA conversion are post-tax non-deductible contributions, I do not owe taxes on the conversion (IRA to Roth IRA that is).
Now, I have learned that my employer offers a Roth 401k option! I would like to understand the best bang for my situation:
1 - Will changing to a Roth 401k affect the abovementioned Roth IRA conversions in any way ? Is there any tax I should beware of?
2 - What is the best way to Rollover the current 401k balance (less than $10k) to a Roth 401k ? Will that affect the Roth IRA contributions in any way?
I would like to keep take advantage of the Roth 401k while continuing with the tax-free backdoor Roth IRA conversions as usual. Please be specific and on point in your response.
Thanks in advance!
Happy holidays!
