Some guys like to filling up with 401a because they can roll over a huge amount into a Roth IRA (ie...way more than the 6,500 contribution limit). Convert that to a Self Directed IRA (SDIRA) and use it to buy real estate. Then everything you make on said real estate goes back into that SDIRA tax free...including any appreciation on the sale of the house. That's one reason why some might want to do it.

 

Your explanation is spot on. For those who don't grasp the nuances of the above technique.

Roth SD IRA can work for real estate.

Plain SDIRA is a bad idea for real estate because it actually increases your taxes. You pay income tax on an already tax advantaged investment.

When our plan recently (2022?) added the in plan Roth conversion, the use of 401a back door Roth became less popular.

The previous lack of RMDs on Inherited Roth IRAs made them a great estate planning tool. They were Nerfed by a change it tax law requiring distribution in 10 years.

 

Considering Blackrock was the architect pushing for ESG considerations in fund management, I think it is abhorrent that this is the fund that has been chosen to start off. Not to mention the measly sub 4% return that they get on their ESG righteousness over the last 5 years. They barely crack 4% over 10 years. Yikes!

 

They are very aware the proletariat are doing this. By the time most of us will get to that point, there will be various overlapping confiscatory schemes put into place like means testing for other benefits, wealth taxes, death taxes, unrealized gains taxes, changing thresholds, etc.

 

You say this, but it is the ruling elite that made the current rules the way they are now. You don’t think all these career politicians on both sides become millionaires from paychecks alone do you?

The back door Roth rules were put in the tax code by dems. They want to publicly state that they’re taxing the rich, meanwhile they just make more convoluted rules that create “loopholes” that allow for massive wealth-building. Despite the ostentatious berating of loopholes in public, their existence is no accident and any changes to tax code simply recolor the same rules with new names/codes/legislation.

So the rules may change over time, but keeping up with the changes will ensure that the opportunity to build wealth will continue for those that spend the time learning said changes, vice those that simply cash a pay or social welfare check.

MBCBP has the opportunity to build wealth within the current structure, however the direction agreed upon by ALPA and the Company is pretty much making a good idea a waste of everyone’s time (and money).

 

Perfect. Thank you!

 

Isn't the company in plan conversion related to company contributions in the Roth 401K vs the Roth IRA on the Megabackdoor Roth? Might worth a new thread

 

Yeah I get that. And to some extent pepople will be able to chase some of these things. The political class doesn't get filthy rich while in office "serving the people" they get rich by front loading their investments to the exact moves they know they're going to make, as well as soft money laundering schemes like insane book deal advances and 5-6 figure 20 minute speaking fees, etc. Its the ultimate insider trading and except for a few they want to make examples out of to keep the rest in line (common criminality) that's never going to change.

The pesant rabble like us were never meant to be doing this to the extent we are and those in control of those pretending to be in control are well aware of it and are coming after it. We're a few votes in one chanber and 2 in the other from generational one party CCP style rule for many decades. They are coming for your wealth with overapping fields of regulatory fire.

 

It’s converting the pre-tax Company 401(k) contributions into after-tax Roth 401(k) dollars.

 

This money is locked away until we’re 59.5 or medically retire, correct?