Author Topic: Mega back door roth or after tax 401k  (Read 1245 times)


  • 5 O'Clock Shadow
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Mega back door roth or after tax 401k
« on: December 12, 2018, 10:31:25 PM »
Hi All,

I read the article about a Mega Back Door Roth (MBDR) by the mad fientist:

I started one and was excited.

Since then I have listened to Radical Personal Finance (RPF) Asset protection series and Joshua talks about ERISA protected 401k's. (his link is not on his website yet)

ERISA protected account seems to be safe from most forms of creditors.  (contribute to after tax 401k then convert it to a roth, which is how to do a MBDR).  That said it seems that IRA's are not protected from creditors in bankruptcy but 401k's are.  I dont plan to be in the situation but I do like to be protected.  A few questions:

1. are after tax 401k's ERISA protected
2. how would you determine if you should convert to a MBDR and when to keep it in an ERISA protected account.
3. any good articles to read about this.  RPF seems to not be overly detailed about how one should go about this balance between the positives from having a MBDR and asset protection of an ERISA 401k.

Thanks for reading.


  • Magnum Stache
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Re: Mega back door roth or after tax 401k
« Reply #1 on: December 13, 2018, 06:08:40 AM »
First, the Radical Personal Finance guy is a little, shall we say, out there. Definitely on the prepper/doomsday/paranoid side of things. Unrelated to this topic, but he also has some anachronistic ideas about the role of women. That's when I stopped listening (and I'm a guy).

Second, the protections offered IRAs are state dependent. It's irresponsible of him to make a blanket statement like that. Find out what the creditor protections of IRAs are for your state if you're worried.

Third, how worried are you really about creditors? I would say the guaranteed cost of paying tax on the gains in after tax is greater than the unlikely cost if you're sued and lose your IRA. Get good insurance to cover liability (auto, homeowners/renters, umbrella), don't take on debts you can't afford, save the max in all tax advantaged accounts regardless of creditor protection, and get on with life.