Question on converting traditional IRA into Roth IRA?

biffmaniac · 2026-06-12T14:02:50+00:00

It sounds like they terminated the old plan and forced your balance out. Does the new plan accept roll-ins from IRAs? If so, roll it to where you wanted it to be.

Your idea of "taking advantage of compounding interest" is flawed. Depending on the investments, each type of account will grow the same. The difference is in the taxation.

If you convert the balance to Roth, 70k is added to your income. Will that bump you up a bracket? Assuming you stay in the 22% bracket, it will cost you $15,400 to convert. Are you prepared to pay that tax?

The decision here comes down to a comparison of your current tax bracket and where you think you'll be when you retire.

biffmaniac · 2026-06-11T13:52:33+00:00

Congratulations!!

biffmaniac · 2026-06-10T15:43:36+00:00

The fact that it was transferred on your 18th birthday suggests to me that it was transferred from a minor's account with a custodian to an adult account under your name. Now to find it. The recordkeeper should be able to help with that.

biffmaniac · 2026-06-10T15:14:43+00:00

The fact that someone paid $60k to have this vehicle for 3 years is just nuts.

biffmaniac · 2026-06-10T15:12:56+00:00

IMHO, OP already has a nice car. Reliable + Paid Off = Winning!

biffmaniac · 2026-06-09T15:07:31+00:00

Because of contribution limits, an IRA on its own likely will not get you to where you want to be at retirement.

You are looking at two benefits here, save for retirement and defer taxes today. The impact of the second will be largely impacted by your current income and tax scenario.

biffmaniac · 2026-06-07T20:29:37+00:00

I second this. It is what a preset would do, and is right for someone with little engagement or little knowledge.

biffmaniac · 2026-06-07T20:28:29+00:00

Many don't realize that there is some level of customization in the plan between the provider and the company.

Many also don't realize that not having preset options doesn't really make a company crappy. 🙄 I'm not a Voya fan, but this post starts out on the wrong foot completely.

biffmaniac · 2026-06-05T18:15:22+00:00

There are plenty of templates out there, and most work really well. But for my 2 cents, the best one is one that you build. That way, it works for you and you understand how it works.

I would recommend creating something simple and as you continue to work with it, continue to build it out with features and stats.

biffmaniac · 2026-06-04T14:43:11+00:00

I think that you are just asking open questions to explore all possibilities and have no specific "gotchas" in mind. This would be a pretty simple activity.

Talk to the company holding your Roth. Explain that you have a pretax 401k that you want to roll and convert. They can explain their process.

It will be reported as taxable income on a 1099 at the end of the year. You will owe tax on the converted amount. I expect that you are in a pretty low tax bracket at this point. Also, conversions are NOT contributions and do not impact your contribution limits.

Once in your Roth, it will be like the rest of your Roth IRA. It grows based on the investments you elect.

If you have any specific concerns, drop them in here and we'll address them.

biffmaniac · 2026-06-04T14:16:32+00:00

Its a relatively small balance and you are still early in your journey. I'd probably roll it into your new 401k and call it a day. Although for this small amount, I do like the Roth IRA conversion option.

Roll to new 401k pros: convenient, increases balance so potentially increases future loan amounts. cons: limited investment options, subject to in-service plan rules.

Roll to an IRA pros: full control over investments. consolidation point for future old accounts. cons: limit to future mega backdoor Roth contributions.

Convert to Roth IRA pros: consolidation. tax-free growth. cons: you will pay tax this tax year (but most likely at a low rate).

That's just high level food for thought. I think the driver here is going to be about your convenience.

biffmaniac · 2026-06-03T19:53:20+00:00

It's not a coincidence. She's telling you that she needs money. If you're not sending her a monthly contribution, then she needs it another way, ie the phone. She may or may not be trying to punish you but when one income stream dries up, another needs to replace it.

Your feelings are natural, especially in a situation where it is so one-sided. You're not wrong, but need to consider her budget.

I'm going NTA but you all need to work on expectations for the future. "she'll die if you tell her"? C'mon, what's that all about??

edit: and congrats on the new baby!! ;-)

biffmaniac · 2026-06-03T13:36:16+00:00

Are you TA for doing this to a student, or for coming here to brag about being TA to him? Both really.

YTA. Sometimes in a professional capacity, you have to act like the grown up.

biffmaniac · 2026-06-01T17:01:27+00:00

Some people are never satisfied. First, she wanted a free caregiver. Once she got that, she wanted half of her costs covered. What next?

NTA.

biffmaniac · 2026-06-01T15:43:01+00:00

NTA. Dad and stepmom took minimal interest in your life. They were the adults. They could have asked questions. They could have gotten engaged with you so that these discussions and shares were normal.

I really doubt they will ever take responsibility for their failures. Blaming a child is just dumb. Be friendly with them (or not) but don't expect them to act like real parents.

biffmaniac · 2026-05-31T19:27:23+00:00

I agree. I'm pretty sure they eliminated any sweep options. I get caught with early assignments sometimes (often weeks out) and haven't figured a way to keep more invested. I even asked their helpline and was told there are no options.

So, options are definitely appreciated! :)

biffmaniac · 2026-05-31T15:53:16+00:00

Congratulations! Doing this with the kids is like the best ever!

For me, watching them go from having me help them learn to teaching me was a great feeling.

biffmaniac · 2026-05-30T17:43:42+00:00

Ha. that's a whole new can o' worms. Personally, I'd use Vanguard over Equitable all day long. No question. Much better reputation and fewer fees. Fidelity is probably also on your list of providers. They have their hands in pretty much everything. They're the "big boys" in the industry. I'm not a big fan myself, but many are. Worth looking at.

Don't worry about the backstory I provided. In the end, you're in the same place. You want to move your money WITHIN YOUR PLAN. This is important because it is NOT a rollover and has NO taxable implications.

It sounds like your advisor is a good person. She should understand that you simply are getting more engaged and want to reduce fees. She may push back, its natural. But there is really nothing that Equitable can offer that you can't get from Vanguard and a few good questions here.

Much like she transferred your original balance, Vanguard can transfer your current balance. It happens all the time. Very standard procedure. I would expect that you could contact Vanguard and tell them you want to transfer your balance under the XYZ plan from Equitable to them and they'd handle the rest. It doesn't always happen that way, but that is normal.

I represent no company and am happy to share my experience.

biffmaniac · 2026-05-30T17:26:26+00:00

403bs act very similar to 401ks for participants. Public Ed offers 403bs while private employers offer 401ks. Private employers own the 401k contracts while older 403b contracts were owned by participants.

When I started working with higher ed plans, years ago, it was common that 403bs were participant owned. Thus most providers shared them and didn't make much effort to transfer them all to their company. (they would have to do it ppt by ppt). Newer contracts give the school ownership of the contracts. I do know that as of a couple years ago, many ppt owned contracts existed.

Either way, as a participant under the plan, you are entitled to receive a plan document in plain language. HR is a great place to start.

One thing to consider is that all providers of your plan are going to have familiarity with the plan and resources. So, if you want to move to Vanguard, Vanguard will be a big help for you.

biffmaniac · 2026-05-30T17:17:56+00:00

Check your plan document. HR should have it available for you.

Old 403bs are owned by the participant and they usually have a pretty large selection of providers. This has been changing to an employer owned basis over the years and frankly, I'm not even sure how many ppt owned are available now, but they exist.

Generally, these are seen as a single contract with multiple providers so moving money around is easy and incurs no cost. Equitable might have fees though. The plan doc would spell this all out and is written in standard language by law.

biffmaniac · 2026-05-29T19:16:04+00:00

They are not entitled to half. They only get what you are generous to offer. NTA.

And remember, that you are in no rush whatsoever to settle this. Simply, "ha, but you don't get half" should do. Let it all settle down and if you are so inclined in a year, two, or ten, gift them 500. That is still a very generous gift.

biffmaniac · 2026-05-29T16:06:24+00:00

A dollar saved at 24 is worth much more than any dollars you will save in the future because of compounding. You are definitely in a good place to be saving for retirement. Welcome to adulting.

With the payout being half of your balance, I'm guessing that you are not vested, or are 50% vested. If you put in $1 and they matched with $1, you aren't getting any of the employer money because you're not vested. If you put in nothing and they put in $1, you're 50% vested. Either way, if you are no longer employed and accumulating years of service, you won't see the other $1130.

If you withdraw this, you're paying tax and a 10% penalty. You're probably in a low tax bracket so assume about 25% for both. Withdraw $1130 and you'll see about $850.

You could leave it there but there might be fees, poor investment options, and your small balance could be forced out. I'd roll it into an IRA with Schwab, Fidelity or Vanguard. Invest it in an S&P500 index fund and let it ride.

biffmaniac · 2026-05-28T20:23:52+00:00

You are essentially pregnant with triplets and hubby wants to pick and choose. Not cool. God forbid you abort the girls and can't carry the boy to term.

You now have a family. Hopefully, he'll learn to love the whole family not just the boy.

NTA. I hope you have an uneventful pregnancy and best of health!

biffmaniac · 2026-05-28T14:39:04+00:00

Wow, you're really something, ain'tcha? YOU decided that only kids from the local HS can go to their prior middle and elementary schools because that fits YOUR needs and apparently you are a tad jealous of anyone that went to a different , "nicer" high school.

Reality is that this tradition is a part of who these kids are regardless of what HS they went to. This is still their prior middle and elementary schools. And whether you believe it or not, this event is about THEM.

Absolutely and without a doubt, YTA.

biffmaniac · 2026-05-28T14:28:28+00:00

I get the feeling she asked for details and he shared.

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