A few questions:
-After you have maxed out the "Mega Backdoor Roth IRA" what happens to the rest of the money from your employee+Co. direct contribution? Is it just the same scenario as if you hit the 401(k) max and have the extra money deposited as cash?
.....it’s pushed to DPSP Cash, so it goes into your pocket.
-If it's just cash, what are you guys doing with that money? Are there other tax-advantaged things to do with it?
....great question, a lot of people do real estate, a lot of people out it into their brokerage accounts and invest it, some save it. That’s your call but do have a plan for it. Otherwise, you may just be better off timing your contributions and company contributions to hit the $55k limit towards the end of the year. In reality, all this is doing is moving numbers around the balance sheet. It’s a finite amount of money and you can choose to take less income at the start of a year for more and the end of a year or vice versa. Or you could space it out equally over the year. Whatever you choose, just have a plan for the money.
-Am I undestanding correctly that you can also contribute $5500 to a Roth IRA in addition to the "Mega"? Assuming you don't hit the $189k earnings limit and have the $5500 reduced.
......yes, in addition to the mega backdoor, you can also do the $5500 backdoor. This comes in handy when you are over the Roth IRA income limit. The backdoor essentially eliminates any income restriction by using the 3 step process I outlined above.