Mid-30s unemployed software engineer. I'm trying to figure out the best plan for the money in my retirement accounts after being laid off a few months ago. Currently, I have about $750k in retirement accounts, $650k from a combination of three 401ks of former employers and 100k from a Roth IRA account. I also have a traditional IRA that I have been using for back door Roth contributions for many years that currently has $11 in it because I fucked up my Roth conversion last/this year. I did not consolidate 401k plans as I moved employers in the past because it didn't make sense to (fees associated with $newer_employer's 401k plans were worse than the $oldest_employer's plans fees, even after not being employed there anymore).

    In an ideal world, I would not keep the money in my most recent former employer's 401k plan because the fees are annoyingly high (they had a .2% quarterly fee while I was still employed there, I am sure it's worse now), but I am not sure the best place to move that money to. And if I'm moving 401k plan's money, does it also make sense to move the rest of the money in 401k accounts?

    Another factor motivating moving/consolidating accounts is that my name changed recently and these old accounts do not have the correct name associated with them. I would like them to all be in my current name and I am not interested in trying to contact prior employers and get all of that changed.

    The options as I see it are:

    1. Keep everything the way it is, incur the fees, live with the name stuff

    Simplest course of action, but doesn't solve the name problem and the least optimal position for the money to stay in. Don't really want to chose this one. That said, I don't mind where the money is allocated (S&P500, International index fund, BND), so there is no strong desire to have more control over my investment options.

    1. Roll some or all of the old 401ks into my traditional IRA

    This would solve my name problem, however it creates the potential for problems with backdoor Roth contributions in the future, if I were to go back to work and earn anywhere near what I did before I was laid off. Also, I could create a big tax problem for myself (due to having made a backdoor Roth conversion this year in May). This is an area that I'm not feeling 100% confident in either, because I think I can unfuck the traditional/Roth IRA if I did this by moving the Roth contribution back to the traditional IRA (and potentially the interest earned on that $7k as well?)? Advice/information here would be appreciated.

    1. Open a solo 401k and roll some or all of the old 401ks into the solo 401k

    I know the least about this option, but I do receive about $500/mo of passive income from an old side hustle, so as far as I understand it, this is something I could do. My understanding is this option would give me the ability to go back to making backdoor Roth contributions in the future, if I were to go back to work at a high salary. But if I did go back to work for an employer, what are the implications for this account?

    1. ???

    This is a smart community, what am I not thinking of?

    I am not planning to return to work in 2026, or potentially ever. I am very fortunate that my spouse still works, which covers our living expenses, plus I have stock from my prior employer that am currently locked out of selling, but could sell in 2026, worth ~$2-3M after taxes (but I am not fully counting on that money until it gets converted to VT).

    What option would you choose? Really appreciate any thoughts folks have.

    Traditional IRA vs solo 401k? How to handle old 401k accounts?
    byu/Mundane-Currency8554 infinancialindependence



    Posted by Mundane-Currency8554

    2 Comments

    1. You could wait until next year to roll over to an IRA, to avoid the backdoor Roth issue for 2025.

      You’d most likely be able to roll that IRA into your new employer’s 401k once you find a new job. And if you don’t, then there’s presumably no backdoor Roth issue as your income won’t be high enough.

    2. Solo 401k if you have or are willing to get legitimate self employment income.  You can keep it open after just can’t contribute more without self-employment income

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