Started Mega Backdoor Roth

[Bird In Hand]

We got our emergency fund back to our target after some lumpy expenses, and with a promotion coming next month we knew we would have a decent surplus each month.  So it finally seemed like the right time to start MBR.

Yesterday I saw the first ~$600 show up in my after-tax account at Vanguard.  Monday I'll call Vanguard to initiate the roll-out to my Roth IRA.  Fingers crossed that the rep will understand what I'm trying to do and execute it correctly.

Fingers crossed even more that sometime later this year I won't get a call from the benefits office at work informing me I'm a HCE and I'll have to (somehow??) undo the roll-outs.

[ixtap]

I remember that feeling. We were able to start soon after I learned about the program. DH's work allows you to contribute up to half of the annual bonus, so that first year we did half of his bonus and the other half went to paying off my student loans, so super milestone.

Congratulations!

[Bird In Hand]

I remember that feeling. We were able to start soon after I learned about the program. DH's work allows you to contribute up to half of the annual bonus, so that first year we did half of his bonus and the other half went to paying off my student loans, so super milestone.

That's awesome...I wish we had been in the position to do this earlier on, but I'm grateful for the chance to do it now.  While I'm at it, I wish I were in the position where annual bonuses were a thing :D

Congratulations!

Thank you!  I'm excited to increase my Roth contributions by $15k/yr.  We'll be socking away $27k/yr total, or close to 50% of our planned yearly expenses in retirement.

[ixtap]

That's awesome...I wish we had been in the position to do this earlier on, but I'm grateful for the chance to do it now.  While I'm at it, I wish I were in the position where annual bonuses were a thing :D

Hahahaha - I was a college professor. It kind of felt like a bonus if you chose to teach summer school...

[Bird In Hand]

I guess you can file this under 'Pride Comes Before a Fall'.  As detailed here, the way my employer's plan is written makes it very annoying, and basically infeasible, to execute the purest form of MBR.

I'm doing in-plan conversions for now, but I'm not sure if I'll want to continue that long-term.

I hereby turn in my Badassity credentials.  If you need me, I'll be sitting in the Chair of Ignominy.  You can find that by taking your first left into the Hall of Shame, and continuing until you reach the Gallery of Mortification.

[Bird In Hand]

Ok, the in-plan conversion went through today, and it made me feel a little better to see that extra $600 of Roth sitting there.  Even though I won't be able to touch it for a long time.

[ixtap]

I would argue that the in plan rollover is the purest form, if not the most commonly spoken of.

[WSUCoug1994]

FWIW - you can complete the IRA to Roth conversion with Vanguard online.  I do it every year.

[Bird In Hand]

FWIW - you can complete the IRA to Roth conversion with Vanguard online.  I do it every year.

Sure, regular Backdoor Roth conversion?  Easy-peasy.  Mega Backdoor Roth going from employer plan to IRA is a whole different ball of wax.

[trc4897]

Congrats! We did this last year with my wife's plan. Got right up to the limit, which ended up being around $30k in mega backdoor Roth (after accounting for regular 401k contributions and employer match). Going for it again this year. Gotta get as much money in now as we can since I can't imagine this loophole will stay open forever!

[trc4897]

Did I jinx us? There is a bill going through that could eliminate the Mega Backdoor Roth loophole at the end of this year!

[mamamustache]

Does anyone know what the implications for those of us counting on a backdoor Roth solution would be if Congress makes them illegal, which had been pending in the "Build Back Better" legislation? Any ideas for backup plans?

[Money Badger]

Offshore tax shelter?   Google search "Panama Papers" for creative alternatives?