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Hello:

I have a 401k with my employer and I have a ROTH. My wife has a standard IRS and no 401k at work. However, she is starting a new job and it will have a 401k.

Will this 401k make her ineligible for her standard IRA? If so, can she transform her standard IRA into a ROTH because of her lose of eligibility?

Bob

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I have a 401k with my employer and I have a ROTH. My wife has a standard IRS and no 401k at work. However, she is starting a new job and it will have a 401k.

Will this 401k make her ineligible for her standard IRA?

No. She can continue to hold her Traditional IRA as she did previously. She may however, depending on income, not be eligible to take a tax deduction for additional contributions to that Traditional IRA.

If so, can she transform her standard IRA into a ROTH because of her lose of eligibility?

Assuming you fall below the income caps for converting from a Traditional IRA to a Roth, this can be done regardless of whether her employer does or doesn't offer a 401K plan.

If she will be restricted from deducting Traditional IRA contributions, but is still eligible to make after tax Roth IRA contributions, then any future contributions should be to a Roth IRA, but there is no reason why she couldn't keep her existing Traditional IRA, while opening a new Roth IRA also.
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PMc:

Thanks.

Bob
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