Originally Posted by
Big E 757
So you just open a stand alone Roth IRA with Fidelity, and then have it linked(?) to the other retirement accounts, and then at the end of the year, have all the 401(a) money rolled into the Roth IRA?
I've done the same as Drone. If you have a Roth IRA elsewhere, you can opt to put your 401(a) in that Roth IRA. The catch is they have to mail you a check, then you send it to wherever your Roth IRA is managed. I didn't want to deal with this, so I just opened another Roth IRA with Fidelity. This way I just make a phone call and it's done within minutes. They will move it over into the Fidelity Roth IRA and it processes by the next business day.
Originally Posted by
Big E 757
Is this better than just directing your personal contributions into a Roth 401(k)? I’m guessing you’re able to get around the $19,000 personal contribution limit? Because the money isn’t tax deferred?
Theoretically, you could contribute up to the 56k max for 2019. Since the company contributions are counted in that 56k, in practice you can't quite contribute that much. I just make a best guess as to what the company will put into my DPSP then set my percentage contribution to get as close to the max as possible. I generally just put all my PS check into 401 after tax.
It's really up to you to decide if you think it will work out better for you in the long run. One nice thing about the Roth IRA is lack of RMDs. One of the big reasons I do this is actually to pump up my Roth IRA. Plan being to convert it to a Self Directed IRA later and use that to invest in more real estate/rental properties.
Originally Posted by
Big E 757
I’m sorry guys, I know some of you have been covering this for years but I finally am in a position to start maximizing my retirement savings, so I haven’t really asked these questions until now. I’ve been caring for a sick/dying parent and also have a daughter with special needs. I have dug out of a large financial burden recently and need to get back on track with my own future.
No worries, it's confusing and it took me a lot of reading and chatting with a CPA friend of mine to wrap my mind around it all. I commend you for these efforts and I wish you and yours the best.