If your current household income doesn’t allow you to contribute to a Roth IRA, I think you should roll it into your current employers 401k plan, if the plan isn’t that bad…so you can do a Backdoor Roth IRA…
So long as you have any IRA account including a rollover IRA, you won’t be able to do a backdoor Roth IRA. And you want to do this before the government decides to take away the ability to do Backdoor Roth IRA
Sounds like for you, since $12k is sitting there, it won’t matter that much for you to move it somewhere.
IRS treats 401k differently from IRA( including Rollover IRA). you can have unlimited amount of money in a 401k and that won’t affect your ability to do a backdoor Roth IRA. But the moment you have a rollover IRA, that will impact your ability to do a backdoor Roth IRA….because the IRS doesn’t treat IRA as separate accounts, it treats all your IRA accounts as 1 big account. so the Backdoor Roth IRA approach of depositing money into a Traditional IRA and immediately rolling it over into a Roth IRA won’t work since if you have any other Rollover IRA, it’s like taking a distribution weighted over all your IRA accounts in which case you’ll then owe some taxes when you do a Backdoor Roth IRA conversion defeating the purpose of it… Had I known, I wouldnt have rolled some of my Broadcom 401k out, since that plan was had a self directed option to invest a had all vanguard index funds. And my current employers 401k plan suck and not worth me rolling in all my money in rollover IRA in there. So I haven’t been able to contribute to a Roth IRA for some time now…..
Note: if you are a techie and looking for a new job, ask if your new employer is offering “mega backdoor IRA” contributions as part of their retirement plan…Zillow does as well as some.techbcompanies now…. If you don’t know what that is, Google for it.
Fidelity in general isn’t a bad brokerage , but don’t fall for their management fees. They are all trying to earn money this way now that all of them offer free trading and they have to figure out how to make.money elsewhere. They do auch better job handling overseas restricted stock then say *cough* Charles Schwab *cough*.
