Should I Back That Thang Up? Protecting Your Retirement with a Roth 401(k) Rollover

Ok, I for one understand, if the economy got you giving the side-eye to your retirement account, you’re not alone. The markets are acting up, inflation is playing games, and you’re probably wondering:

“Should I back that thang up and roll over my current retirement into a Roth 401(k) to protect it?”

Let’s break it down because the answer could be a whole power move for your future.

Can You Back It Up into a Roth 401(k)?

Yes — IF a few things line up:

• Your employer’s Roth 401(k) allows outside roll-ins

• You’re rolling from a pre-tax account like a Traditional IRA or Traditional 401(k)

• You’re ready for a Roth conversion, meaning:

  • You move the money into a Roth 401(k)

  • You pay taxes now

  • Your money grows tax-free and comes out tax-free later

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Why Do It Now? (Especially in a Recession)

Let’s keep it real. Now might be the best time to make this money move:

• Market is down = lower value = lower taxes. Converting when your balance is down could mean paying less in taxes now and letting your rebound gains grow tax-free. That’s a silent win.

• You may be in a lower tax bracket. If your income dipped this year), your tax bill for converting will be smaller.

• Tax-free money in retirement = more flexibility. Roth money lets you move differently later in life — no taxes, no drama.

  
  

But Don't Get Caught Slippin’…

Let’s not act like it’s all roses. Here's what you need to watch:

• Yes, you’ll pay taxes now. That $15K you roll over? It gets added to your income. Uncle Sam will want a cut.

• No early withdrawal penalty — but plan ahead. It’s not a withdrawal, so no 10% penalty — but if you don’t prep for the taxes, you might feel it next April

• Your employer has to allow it. Not all Roth 401(k) plans accept outside roll-ins. Call HR or your plan provider to confirm.

How to Back That Thang Up (The Smart Way)

1. Know what you’ve got. Traditional IRA? Old 401(k)? Pre-tax? The kind of account matters.

2. Ask your employer:“Do you accept roll-ins into the Roth 401(k)?”

3. Get a tax estimate.*****Don’t go all in if the tax hit is too much. You can do a partial rollover to ease into it.

   
   

✅ Final Word: Should You Back It Up?

If you’re middle class, feeling the squeeze of this economy, and want more control over your retirement, then yes, backing it up into a Roth 401(k) or Roth IRA might be your recession-proof glow-up.

It’s like planting your money in the right soil now…So it can grow wild and free — tax-free — when it’s your time to shine.

About the contributor

Michelle Williams is an IRS Enrolled Agent, licensed insurance broker, and financial educator with over 10 years of experience helping individuals and small business owners navigate taxes, health insurance, and retirement planning. She is the founder of Chime In Consultancy, where she empowers clients to make confident money moves at every stage of life. When she’s not breaking down tax codes or assisting people with benefit options, you’ll find her building businesses and keeping it real on all things financial freedom.

Visit chimeinconsults.com to learn more.