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-   -   Questions for you Mega-Backdoor Roth'ers... (https://www.airlinepilotforums.com/delta/114709-questions-you-mega-backdoor-rothers.html)

Broncos 06-29-2018 02:31 AM

Questions for you Mega-Backdoor Roth'ers...
 
With the 30 June paycheck, I just hit the $55,000 415(c) limit. $17,700 from Delta and $37,300 in after-tax contributions from me. I've rolled the entire $37,300 into a Roth for the Mega Backdoor (done incrementally every two weeks). My questions...

1) Am I still eligible to contribute to a Traditional IRA this year?

2) If so, how much? $5500?

3) Can that amount also be rolled into the Roth?

P.S. I'm not old enough for catch-up contributions.

Sparty 06-29-2018 04:55 AM


Originally Posted by Broncos (Post 2624325)
With the 30 June paycheck, I just hit the $55,000 415(c) limit. $17,700 from Delta and $37,300 in after-tax contributions from me. I've rolled the entire $37,300 into a Roth for the Mega Backdoor (done incrementally every two weeks). My questions...

1) Am I still eligible to contribute to a Traditional IRA this year?

2) If so, how much? $5500?

3) Can that amount also be rolled into the Roth?

P.S. I'm not old enough for catch-up contributions.

How were you able to put in 37,300 personally? I thought the limit was 18,500?

crewdawg 06-29-2018 05:09 AM


Originally Posted by Broncos (Post 2624325)
1) Am I still eligible to contribute to a Traditional IRA this year?

Yes

2) If so, how much? $5500?

$5,500

3) Can that amount also be rolled into the Roth?

Yes

As always, I'm not a tax guy and it's always good to chat with one. However, I have done the exact same thing you did.


Originally Posted by Sparty (Post 2624373)
How were you able to put in 37,300 personally? I thought the limit was 18,500?

401k is limited to $18.5. You can continue to contribute to 401a up to $55k (401k + Company contributions + 401a). If you're interested in what he's talking about, google "Mega back-door Roth IRA." This is not to be confused (though often is) with the regular back-door Roth IRA.

Gunfighter 06-29-2018 09:56 AM

I believe you can also skip over the 18.5 in 401k and go straight 401a. That way you don't have a split between Roth 401k and Roth IRA.

m3113n1a1 06-29-2018 11:42 AM

Love the financial knowledge on this forum. What's the advantage of doing 401a vs Roth 401k? Is it just because you can pull it out of the company account and roll it into your own Roth IRA (mega backdoor)?

Broncos 06-29-2018 11:43 AM


Originally Posted by Gunfighter (Post 2624555)
I believe you can also skip over the 18.5 in 401k and go straight 401a. That way you don't have a split between Roth 401k and Roth IRA.

Yes you can. I have contributed $0 to 401k. 100% of my contributions have been 401(a).

Broncos 06-29-2018 11:43 AM


Originally Posted by crewdawg (Post 2624381)
As always, I'm not a tax guy and it's always good to chat with one. However, I have done the exact same thing you did.



401k is limited to $18.5. You can continue to contribute to 401a up to $55k (401k + Company contributions + 401a). If you're interested in what he's talking about, google "Mega back-door Roth IRA." This is not to be confused (though often is) with the regular back-door Roth IRA.

Thanks Crewdawg

tunes 06-29-2018 12:37 PM


Originally Posted by Broncos (Post 2624630)
Yes you can. I have contributed $0 to 401k. 100% of my contributions have been 401(a).



I guess what I've failed to comprehend yet is what benefits does the Roth IRA have to the Roth 401k? I haven't pulled the trigger and switched from Roth 401k yet because I haven't been able to figure that out yet.


Sent from my iPhone using Tapatalk

crewdawg 06-29-2018 01:03 PM


Originally Posted by tunes (Post 2624651)
I guess what I've failed to comprehend yet is what benefits does the Roth IRA have to the Roth 401k? I haven't pulled the trigger and switched from Roth 401k yet because I haven't been able to figure that out yet.

-Roth 401k has required minimum distributions...Roth IRA does not.
-I can turn my Roth IRA into a SDIRA and invest in real estate...I can not directly do that with my Roth 401k.
-$55k/yr (401a -> Roth IRA) vs 18.5k/yr (401k).
-Roth IRAs are much more flexible wrt passing it on to your heirs.

grahamlax 06-29-2018 03:00 PM

what is the difference between a backdoor roth ira contribution (single- putting $5,500 in to regular IRA, paying one day of tax, and rolling it in to my roth IRA), and the mega backdoor roth ira contribution?


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