Author Topic: Fidelity automated the mega backdoor Roth  (Read 1180 times)

thedigitalone

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Fidelity automated the mega backdoor Roth
« on: August 13, 2019, 04:54:47 PM »
Interesting, I might have to open an account there.

https://www.reddit.com/r/personalfinance/comments/cohe4e/fidelity_just_industrialized_the_mega_backdoor/

According to the comment section, they key words are "automatic conversion of after-tax balances to a Roth source" when you are on the phone setting things up.

Zamboni

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Re: Fidelity automated the mega backdoor Roth
« Reply #1 on: August 13, 2019, 07:38:14 PM »
Good to know.

My employer recently switched our 403b to fidelity, and I have to say they are certainly growing on me.

shuffler

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Re: Fidelity automated the mega backdoor Roth
« Reply #2 on: August 13, 2019, 11:03:13 PM »
Fidelity does automatic "mega" backdoor Roth conversions for me in my 401k.
I think it's been ~2 years now they've had that service (for my 401k plan).  Kinda nice.

appleshampooid

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Re: Fidelity automated the mega backdoor Roth
« Reply #3 on: August 14, 2019, 09:12:51 AM »
We have our plan with Fidelity but I don't believe the first step (after-tax contributions) is allowed at all.

For those who are seasoned at the Mega Backdoor Roth (especially with Fidelity), do you make the initial after-tax contribution via the standard website form where you set up your contributions? Like there's a text box next to the standard pre-tax and Roth options?

Our plan doesn't have that, but I'm wondering if you have to call them or talk to payroll or something. Also, they automatically cut off your contributions at 19k for the year, so I wouldn't ever get "accidental" after-tax money in there.

I could make use of mega back door if my plan did support it (plenty of extra money going into taxable right now), but the headache/hassle/talking to people (the WORST) has always stopped me from seriously looking in to it.

seattlecyclone

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Re: Fidelity automated the mega backdoor Roth
« Reply #4 on: August 14, 2019, 09:38:45 AM »
My former employer's plan (through Vanguard) added the automated after-tax conversion feature this year as well.

shuffler

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Re: Fidelity automated the mega backdoor Roth
« Reply #5 on: August 14, 2019, 08:23:01 PM »
For those who are seasoned at the Mega Backdoor Roth (especially with Fidelity), do you make the initial after-tax contribution via the standard website form where you set up your contributions? Like there's a text box next to the standard pre-tax and Roth options?
I set it up via fidelity.com, when looking at my 401k account.
There is a place to specify your contributions.  I'm able to specify x% (of salary) for pre-tax contribution, and y% for after-tax contribution.
Then there's a drop-down/check-box thing for specifying that you want the after-tax converted via backdoor.  (Hmm!  I just noticed they do the conversions daily!)

So no, I don't have to talk to anyone or do anything.  Set it and forget it.

(I did used to have to make a phone call to do the conversion, before they added this feature.  I did it quarterly, IIRC.  So this daily conversion is both simpler and it probably saves me a bit of cash.)