After you buy a new iPhone or otherwise get a different fresh iPhone, you will need to smoothly move the data from your current iPhone to this new iPhone. Apple Quick Start makes this very easy.
Important: Before you start, make sure your current iPhone is using the latest iOS to reduce the change of migration failure. You can do so by go to Settings -> General -> Software Update. You don’t need to worry about the new iPhone: If the new iPhone does not have latest iOS, it may automatically perform software update in the early stage of migration, for example after it gets WiFi connnection information from your current iPhone.
You can migrate from current iPhone to new iPhone wirelessly through WiFi, or wired through a cable. Depending on your iPhone models, you may need to use a USB-C to USB-C cable, Lightning to USB-C cable, or Lightning to Adaptor to Lightning set-up.
If possible, I would recommend a wired connection for data migration. Even the slow Lightning to USB-C cable can do 480Mbps. Although your WiFi may boast a faster speed, in practice it is often slower due to interference with your neighbor’s WiFi and room wall attenuation, and may also be less reliable.
– leave as; – transfer to new job’s plan; – rollover to IRA; – take distribution (may have penalty)
– leave as; – transfer to new job’s plan; – rollover to Roth IRA; – take distribution (may have penalty)
No impact
No impact
Withdrawl age
59.5
5+ year account and (59.5 or disabled or death)
Special rule if age>55 and job termination.
59.5
5+ year account and (59.5 or exceptions: disabled, 1st home buy)
Early withdrawl penalty
10% penalty
10% penalty and tax complexity on gain
10% penalty
10% penalty and tax on gain
Required Minimum Distributions (RMD)
Must begin at 73. Amount depends on balance and life expectancy.
no requirement if alive; leave to your heirs;
Must begin at 73. Amount depends on balance and life expectancy.
no requirement if alive; leave to your heirs;
Backdoor Roth IRA
If you are a high income earner, you may not be able to contribute to a Roth IRA account (unrelated, but neither traditional IRA). For this, you may consider to create a backdoor Roth IRA. This is legal, but it has pros and cons, and may not be suitable for everyone.
You can rollover some traditional IRA or 401(k) balance to a Roth IRA, or close and convert a traditional IRA or 401(k) account to a Roth IRA. This rollover or conversion is moving pre-tax money to after-tax, and you owe income tax for the year immediately.
Note that rollover or conversion is not subject to contribution limit to Roth IRA, which is often low ($7,000 in 2025). Basically, you can rollover or conversion any amout from traditional accounts to Roth IRA. But of course, you owe more income taxes if you convert more, potentially pushing to a higher tax bracket.
For people that don’t have traditional IRA, backdoor Roth IRA means moving/converting money from (traditional) 401(k) to Roth IRA by adding moved money as taxable income for the year, disregarding income limit that would otherwise apply. Depending on how much is moved/converted, this may increase your W2 taxable income considerably.
If you can contribute to Roth 401(k), Roth IRA is attractive. They serve the same goal (tax-free on gains), but Roth 401(k) has less restrictions.
In a sense, employer sponsored Roth 401(k) is like a backdoor, since now you get access to a “Roth” account, although Roth 401(k) is not Roth IRA, it is better than Roth IRA.
Mega Backdoor Roth
A lot of employer sponsored retirement plan allows you to contribute to both 401(k) and Roth 401(k) accounts. However, take this example:
You contribute $13,500 to 401(k) and $10,000 to Roth 401(k), reaching employee contribution limit $23,500.
Your employer matches 6% of your income, say $10,000. This could go into your 401(k), or proportionally into both 401(k) and Roth 401(k).
The total limit is $70,000.
There is a $70,000 – $23,500 – $10,000 = $36,500 hole. What can you do with it?
The answer is that, you may use it as “after-tax 401(k) contributions”. This is neither pre-tax nor after-tax contribution, but somewhere in between.
Type of 401(k) contribution
Contribution
Withdrawl in retirement
Notes
Pre-tax
Contribute pre-tax
Pay ordinary income tax on contributions and gains;
Roth
Contribute after-tax
Pay no tax on contributions and gains;
After-tax
Contribute after-tax
Pay no tax on contributions; Pay ordinary income tax on gains;
Maybe not eligible for employer match
It apperas that after-tax 401(k) contribution does not have benefits: after all, you can take cash and invest yourself, and the gain will again be taxed (but as short term/long term gains).
The real benefit is that, the after-tax 401(k) contribution can be converted to a Roth account. The money can be moved to a Roth 401(k) account, so called in-plan Roth conversion. When the conversion happens, there is no tax for the amount of your contributions, but any gains will incur tax. Normally, you need to (set up) periodically rollover “after-tax 401(k) contributions” to Roth 401(k).
The reason that this is called mega backdoor, is because of the large amount it can convert into Roth. In the example above, this amount is larger than half of the $70,000 limit of 401(k) contribution.
In Fidelity, go to Contributions -> Change Contributions -> Contribution Maximizer, under “In-Plan Roth Conversion”, choose “Convert After-Tax to Roth” is basically Mega Backdoor Roth. If this is the first time, refreshing the page may show choice reverted – wait for one day or two to show correctly.
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