The case I can think of that he wasnt eligible for a pre-tax IRA contribution and it was before Roth so made a post tax contribution.

The other scenario is if this a work place 401k with mixed Roth and IRA money you could end up in that situation

Any firm worth its salt would never withhold without the client’s approval first.

Your representation of a Backdoor Roth IRA contribution does not clearly speak to the strategy so many use: a non-deductible Traditional IRA contribution and an immediate (next day) conversion to Roth.

This quote is out of date in light of the SECURE Act. Except for a limited class of beneficiaries (spouses, disabled, etc.), there are no RMDs for inherited IRAs and all inherited IRAs must be fully distributed within 10 years.

I respectfully suggest that you update your article to account for the SECURE Act.

Discussions of how to do Roth conversions, tax rates before and after retirement, RMD’s at 72, % of social security taxed, enough money to live on each year, the five year rule for distributions from a Roth IRA (even if rolled from a Roth 401K), etc. are all worthwhile issues to resolve, but I have yet to see a definitive calculation of how to optimize the conversion of a pot of money (say $1 million) over a time period (say 10 years from age 62 to 72) assuming a given life expectancy (say 100 years old to be on the safe side). As pointed out, the future is uncertain and changing tax rates would not be a surprise. Let’s also assume enough retirement income to be in the same tax bracket in retirement as prior to retirement, as well as a willingness to move into one higher tax bracket, but no more, with the annual income tax (state and federal) on the Roth conversion amount (even if you have to use previously converted Roth accounts to pay the taxes when you run out of taxable account money). Do you know of such a calculation? Too many variables? In the end, if you conclude that there are tax advantages for you to do the Roth conversion in the first place, then how do you know the timing and amounts you do are optimal? It seems there is sort of a tipping point where the combination of RMD’s, pension income, investment income and Social Security income put relatively wealthier folks into higher tax brackets and make more of their Social Security income taxable. Since the readers submit examples, here is an example for a couple, age 63, living to 100 (leaving aside issues of one person out living the other). Retiring at 64 say.
$46,000 of combined annual social security income starting at age 70 to maximize the benefit.
$1,000,000 divided equally among 401a, 403b and 457 accounts (or it could be just one 401k account) converting to an IRA upon retirement with subsequent partial conversions each year to Roth IRA’s.
$700,000 in a Roth 401K
$250,000 in taxable accounts
$170,000 in Roth IRA’s
Other folks will have far less or far more, but the principle is the same. Dividing the amount of money to convert by 10 to convert over 10 years is easy. And living on other assets and SS is fine to say. But is it optimal? The question and the time value of money issues overwhelm the “experts” that I have consulted. No online calculators found for this, I suppose.

In Jan 2020 I rolled over from my workplace 401K Fidelity Pre-87 and Post-86 the funds to a Fidelity Rollover IRA (pre-tax) and Roth IRA (after-tax), respectively. I also have a non-deductible Traditional IRA with T Rowe Price (TRP) which I would like to convert in its entirety to T Rowe Price Roth IRA. However with the pro-rata rule, my taxable income on the conversion amount would be much higher; if I didn’t have the Fidelity Rollover Account. So my questions relate to allowed workarounds to avoid the pro-rata rule. Possible workaround actions::

1) My workplace 401K does allow for a reverse roll over of my Rollover IRA and Roth IRA. So I can undo what was done in Jan 2020, and then go ahead with the TRP Roth conversion in this year. After the conversion, am I correct that then I can not go ahead and re initiate my previous 401K rollovers in 2020, as the pro-rata rules are calculated on the “end of year” values of all my (non Roth) IRA accounts. I believe I would have to wait until Yr 2021 for the workplace rollover; to avoid the pro-rata rule applying again?

2) If I don’t perform a reverse roll over, but go ahead with the non-deductible Traditional IRA to Roth IRA full conversion (or full distribution) of the fund (earning and after tax contribution). And pay the tax on the tax income. Since at the end of the Yr 2020, I would have a zero balance in my TRP Traditional IRA account and only the Fidelity Rollover IRA. I am correct that since the pro -rata rule applies to the “end of year” values of all my (non Roth) IRA accounts, and since I only will the Fidelity Rollover IRA with value; the the pro-rata rule would not apply.

Appreciate your help with my understanding of the application of the pro-rata rules and potential workarounds.

“Traditional IRA: Consists entirely of after-tax contributions. Total value is $200,000 with after-tax contributions of $40,000.”

Thanks for any advice you can offer. Love your website!
Linda