I do the same with my Roth principle. But it's worth mentioning that, when you roll a 401k into a Roth you owe taxes on it. And if you have to take a portion of that 401k principle to pay the taxes, you'd almost certainly be better off keeping it int he 401k.
Also, if you imagine you'll have the same tax rate now as you will at retirement, there's no advantage to a roth. Whether you prepay taxes or defer them, it's all the same, the cash available at retirement will be the same.
The real advantage to a Roth is if you think you're paying a lower tax rate now than you will be when you retire.
Oh right. When you rollover, you pay normal income taxes on it. My big point was that if I have a year where I have minimal income, normal income taxes are going to be so low that rolling it over makes a ton of sense. I doubt I'll ever have a lower tax rate than in a year with very little income.
Also, if you imagine you'll have the same tax rate now as you will at retirement, there's no advantage to a roth. Whether you prepay taxes or defer them, it's all the same, the cash available at retirement will be the same.
The real advantage to a Roth is if you think you're paying a lower tax rate now than you will be when you retire.