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I have considerable Roth assets because my employer's 401k allows for the Mega-backdoor, which means I can put $30k+ per year of after-tax income into 401k (bey
by pinkyboy 2mo ago
I have considerable Roth assets because my employer's 401k allows for the Mega-backdoor, which means I can put $30k+ per year of after-tax income into 401k (beyond the normal pre-tax contributions) perform a Roth-in-plan-conversion on the after-tax assets, and then roll it out into a Roth IRA.
- what 2mo agoYou can’t personally contribute to a 401k beyond the limit, even after tax. Your employer can add extra via match or profit sharing contributions. What are you talking about?
- pinkyboy 2mo agoFor 2026, the 401k limits are $72,000 overall, and $24,500 for pre-tax employee contributions. Assume an employer who matches 50% up to pre-tax employee contribution max, the result is this: $24,500 pre-tax employee contribution $12,250 employer match This leaves $35,250 to the $72k limit. Roth MegaBackdoor enabled plans allow the employee to put $35,250 of _after tax_ contributions in to fill that window, and to convert them to Roth assets. They can even be rolled out into a Roth IRA while the 401k is still active. I have no clue why you think this relatively common plan option is, somehow, impossible.