ROTH IRA CONVERSION TO TRADITIONAL IRA
I am 56 years old and plan to work until at least 59 1/2 and possibly until age 62. I am considering converting an old(former employers) 401k to a ROTH IRA this year that I already have established to take advantage of the lower current 2020 tax rates. I also have several more educational tax deductions in 2020 that I won’t have in the future with my two kids graduating this December so I believe that it is a good time to do the conversion. My goal is to have all of my funds in a ROTH IRA at retirement to take advantage of benefits of the ROTH. My question is, if I do the 401k to ROTH IRA Conversion and were to change my mind later this year, can the funds in the ROTH IRA be converted to a Traditional IRA and taxes not be due on the conversion? I believe this an approved exception to the new recharacterization rules from a few years ago but I wanted to be sure. Thanks for your feedback.
Permalink Submitted by Alan - IRA critic on Sun, 2020-08-09 19:44
Once funds are rolled into a Roth IRA as a conversion or qualified rollover contribution (401k to Roth IRA), there is no way to reverse the transaction by recharacterization, and taxes will be due. Recharacterizations of these rollovers is what was eliminated, and there is no other way left to accomplish this. Distributions from a Roth IRA cannot be rolled into any other type of plan other than another Roth IRA.