Can I Convert My Whole 401(k) to a Roth IRA?

Financial planning can help you determine whether converting is suitable for you. Keep in mind, however, that switching your pre-tax 401(k) funds over to a Roth IRA requires paying taxes on what has been converted.

Tax payments could impact your Social Security benefits or Medicare premiums if they raise your income above certain thresholds, so consulting a tax advisor is highly advised.

What You Need

Step one is determining the paperwork necessary for conversion. Each financial institution has its own process; contact both old and new custodians in order to understand what paperwork they require for completion.

Your 401(k) contains both pretax contributions and earnings that need to be converted, so all these must be transferred over to a Roth IRA – though you may be exempt from having to convert any after-tax or nondeductible contributions.

Experts advise planning out your strategy in advance in order to minimize taxes. For instance, you could spread out the money you move into Roth accounts over multiple years so as not to change tax brackets suddenly.

Schwab Intelligent Portfolios may provide another viable option for managing funds you wish to transfer, with automated advice tailored specifically to your goals and risk profile. As with any financial decision-making, always consult a professional first.


Rolling over pretax IRA funds into a Roth will result in taxes being withheld upon conversion; depending on your state’s tax laws and expected future tax bracket, this could be beneficial as withdrawals from Roth accounts are tax-free. An alternative approach involves contributing money first into a traditional nondeductible IRA account and later converting that into a Roth. This method is known as backdoor Roth IRA contribution technique and it may provide an effective solution for individuals who do not meet eligibility requirements to contribute directly into a Roth.

Damaryan advises Roth conversion if you anticipate being in a higher tax bracket later or want to leave funds from an IRA tax-free. You should ensure you have sufficient nonretirement assets on hand in order to pay any income taxes owed for any conversion amounts that occur.


Converting from a 401(k) to a Roth IRA requires certain fees that should be kept in mind. These costs will be deducted from your earnings over time and could add up quickly.

Tax costs are the main expense involved with Roth conversion. Doing so requires paying income taxes at the time of conversion – potentially an expensive proposition if you fall into a higher tax bracket now.

However, if your tax bracket will drop after retirement and tax-free withdrawals will become more attractive to you than their costs today. An experienced financial professional can assist with this evaluation process and devise a plan tailored specifically to you; taking into account factors like cash flow and affordability as well as timeframe, estate planning implications, estate tax implications and estate taxes before recommending Roth conversion or not.

Time Frame

There are ways to mitigate the initial tax impact of converting an IRA into a Roth. One is converting at a time when assets decrease in value – such as during a coronavirus pandemic – which may help minimize taxes you owe.

Converting an IRA to a Roth while in a lower tax bracket now will help ensure you won’t face higher rates later when withdrawing assets from it.

Before switching your traditional 401(k) balance over to a Roth account, however, make sure you have enough funds available for tax payments resulting from that conversion. Otherwise, early withdrawal penalties might require withdrawing assets early and could prevent years of tax-free investment growth; so be sure to consult a financial planner beforehand.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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