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Questions for you Mega-Backdoor Roth'ers...

Old 06-29-2018, 02:31 AM
  #1  
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Default 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.
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Old 06-29-2018, 04:55 AM
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Originally Posted by Broncos View Post
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?
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Old 06-29-2018, 05:09 AM
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Originally Posted by Broncos View Post
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 View Post
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.
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Old 06-29-2018, 09:56 AM
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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.
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Old 06-29-2018, 11:42 AM
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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)?
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Old 06-29-2018, 11:43 AM
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Originally Posted by Gunfighter View Post
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).
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Old 06-29-2018, 11:43 AM
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Originally Posted by crewdawg View Post
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
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Old 06-29-2018, 12:37 PM
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Originally Posted by Broncos View Post
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.


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Old 06-29-2018, 01:03 PM
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Originally Posted by tunes View Post
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.
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Old 06-29-2018, 03:00 PM
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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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