Author Topic: Mega Backdoor Roth  (Read 1281 times)

Goldy

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Mega Backdoor Roth
« on: April 18, 2018, 06:54:07 PM »
I just found out that my 401k plan allows for after tax contributions AND allows for in service withdrawals for those after tax contributions.  Iím stoked!  I was contributing to taxable accounts but will now be switching over to fully funding my after tax in order to super charge my Roth (and my wifeís) an extra 25k per year into each one.  This is in addition to maxing the 5500 in each one and maxing the 401k.

Do any of contribute to a mega Roth?  Any tips for when to convert?

swashbucklinstache

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Re: Mega Backdoor Roth
« Reply #1 on: April 18, 2018, 07:18:06 PM »
If your plan doesn't care (or charge) how many times you do this, I'd convert immediately after contributing to avoid/minimize gains you could be held responsible for tax-wise through the conversion.

seattlecyclone

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Re: Mega Backdoor Roth
« Reply #2 on: April 18, 2018, 08:16:07 PM »
I participate in the mega backdoor at work. My wife does too. Mine allows me to do the conversions online with a few clicks, so it happens after pretty much every paycheck. Hers requires a phone call and/or paperwork, so we rarely get around to it.

dragoncar

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Re: Mega Backdoor Roth
« Reply #3 on: April 19, 2018, 04:42:31 AM »
Have you considered the ultra mega Blackfoot sloth?

Civex

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Re: Mega Backdoor Roth
« Reply #4 on: April 22, 2018, 07:24:02 AM »
If your plan doesn't care (or charge) how many times you do this, I'd convert immediately after contributing to avoid/minimize gains you could be held responsible for tax-wise through the conversion.

+1

The sooner you can convert, the better. Any change in value you will have to take into account for taxes. My plan allowed a maximum of 4 rollovers/year.

I contributed for the 1 year it was available to me; they had an income cut off. I maxed it for that year and it definitely made a huge difference for my Roth IRA.

Congrats! That's a huge opportunity.

Goldy

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Re: Mega Backdoor Roth
« Reply #5 on: April 22, 2018, 08:42:12 PM »
Well we got the allocations set in time for this next pay period so iím going to try and convert one next week and see how the process goes.  Our 401k has a 50% salary maximum contribution limit but we went up to the limit to try and save as much as possible this year.  Next year I can drop it down to a more sustainable number.