Backdoor Roth alongside traditional 401k conversion to Roth
Hi all.
I am 30+ years from full retirement, filing single, and my effective marginal tax rate is >30% with maxing out my traditional 401K and HSA. I don’t have a Roth or traditional IRA.
I have about 20k in a traditional 401k from a job earlier in my career. My goal is to eventually roll this over into a Roth IRA (taking the tax hit) in a year when my income is lower (take a sabbatical, get married and file jointly in a lower tax bracket, take mat leave, etc). Or if that doesn’t end up happening I’ll just do the conversion when I retire.
I would like to start implementing a backdoor Roth strategy to funnel more money into a Roth so that I can preserve some optionality in retirement around my withdrawals/taxes.
Question: is there any disadvantage/concern with having an existing well funded Roth IRA if I then want to do a Traditional 401K to Roth IRA roll over? If so, I can do the roll over now, but I’m trying to avoid the tax hit at my higher income/tax rate.
Thanks in advance :)