Author Topic: Attempting to max pre tax and post tax this year need advice  (Read 1217 times)

the_fixer

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Attempting to max pre tax and post tax this year need advice
« on: January 10, 2018, 07:46:33 AM »
Hello,

I am attempting to max my pre-tax 401k and after tax this year and would like to make sure my math is correct and that I do not mess anything up.

Planning to use my companies 401K, I can do pre tax 401k, roth 401K and after tax with the ability to do in service rollovers for the after tax (Mega backdoor Roth) I already called the provider and verified.

My contribution is set at the max 75% into my pretax 401k, the $18,500 should be fully funded by mid April
My company automatically puts in 1% so no worries about missing out on matching by funding early. I am guessing about $1000 after overtime

So that brings me to $19,500

From what I have read I am allowed $55,000 defined contribution limit for 2018 leaving me $35,500 to put into my after tax that I will rollover as fast as possible into a Roth IRA to avoid paying too much tax on gains.

Am I correct that this will max out my defined contribution limit for 2018 (I do not qualify for the makeup contributions due to being too young)

Thanks for the gut check


MDM

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Re: Attempting to max pre tax and post tax this year need advice
« Reply #1 on: January 10, 2018, 11:02:13 AM »
That looks good.  You will put $0 into the Roth 401k because the t401k should be better for you, correct?

the_fixer

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Re: Attempting to max pre tax and post tax this year need advice
« Reply #2 on: January 10, 2018, 12:01:30 PM »
Correct our combined income / company sponsored plans put us above the thresholds


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MDM

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Re: Attempting to max pre tax and post tax this year need advice
« Reply #3 on: January 10, 2018, 12:05:44 PM »
Will you also put $11K into Roth IRAs, perhaps using the backdoor Roth method?

the_fixer

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Re: Attempting to max pre tax and post tax this year need advice
« Reply #4 on: January 10, 2018, 01:53:15 PM »
The $35,500 will be converted into a Roth IRA Via backdoor Roth.

Not sure I understand about the 11k I do not think we are allowed to put anything into a traditional Roth IRA and for sure we would not get a tax break because our income is too high.


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MDM

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Re: Attempting to max pre tax and post tax this year need advice
« Reply #5 on: January 10, 2018, 02:29:50 PM »
The $35,500 will be converted into a Roth IRA Via backdoor Roth.

Not sure I understand about the 11k I do not think we are allowed to put anything into a traditional Roth IRA and for sure we would not get a tax break because our income is too high.
What you plan is often referred to as "mega backdoor Roth."  That is separate from "backdoor Roth".  Your choice to take advantage of both, or not.

the_fixer

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Re: Attempting to max pre tax and post tax this year need advice
« Reply #6 on: January 10, 2018, 03:10:07 PM »
I was not aware I could do an extra 11k into a Roth but that is great since I will have an extra ~20k to find a home for. I will try to read up on how we can take advantage of that option.

Thanks!


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ZMonet

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Re: Attempting to max pre tax and post tax this year need advice
« Reply #7 on: January 14, 2018, 05:47:02 PM »
Is there an option to put mega backdoor Roth funds for 2017 (up until tax day)?  I thought I had read that this is an option in some plans but I'm admittedly a novice at mega backdoor Roths.

MDM

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Re: Attempting to max pre tax and post tax this year need advice
« Reply #8 on: January 14, 2018, 06:01:59 PM »
Is there an option to put mega backdoor Roth funds for 2017 (up until tax day)?  I thought I had read that this is an option in some plans but I'm admittedly a novice at mega backdoor Roths.
Not Mega Backdoor Roth, but yes for Backdoor Roth IRA.