Hey mustaches!
I recently started a job, and I discovered that the Mega Backdoor Roth may be possible. I have never done this before, so I wanted to run it by all of you smart folks to make sure I'm not going to mess anything up and have the IRS after me :).
My retirement plan states that it allows pre-tax 401K contributions, Roth 401K contributions, and "voluntary after-tax contributions." It expressly states that we can put up to a maximum of $53,000 total, $18,000 to the 401K, and $35,000 of voluntary after-tax contributions.
It also allows in-service withdrawals. However, I can only do an in-service withdrawal once every 12 months.
So, this means I can do the Mega Backdoor Roth, correct? I should max out the after-tax contributions, then do an in-service withdrawal and convert it into a Roth IRA, correct? When I do the in-service withdrawal, do I keep it at the same bank, or would I be allowed to convert it into a Roth IRA at Vanguard?
When I make my voluntary after-tax contribution, should I put it in a money market account? Or should I put it in the type of account I want it to be after the in-service withdrawal and conversion? I would eventually want it to be in a Target Retirement fund.