I think you're right. I wasn't factoring that in.

$24.5k is only the PRE-TAX employee limit. Post tax money you can run right up to the total maximum combined contribution.

…..and then immediately have Fidelity convert it to Roth funds and never pay tax on it again

How do you do this? Phone call?

Yes. Call Fidelity. Tell them you want your post-tax 401k contributions immediately converted to Roth. It’s a 1 time phone call. They’ll continue to automatically make that conversion until you call them back and tell them to stop. (Idk why you’d ever do that)

While clearly the smart thing to do with excess funds you don’t need for yearly liquidity, they 100% are coming for it retroactively either directly or indirectly. Wheels are already in motion to steal your SS through “means testing” because “millionaires” don’t “need” it and we have to “save” it etc.

I did this recently. “Post-tax contributions” go into a 401a account rather than your existing 401k. So before you call Fidelity to direct them to convert the contributions, first you have to set up 401a contribution withholdings from your paycheck. You can set the 401a post-tax retirement contributions up on the same election page where you specify the percentage of withholding for your 401k.

(It is a little confusing at first because on your Fidelity portfolio page, there is only a single line item for Delta retirement money so it’s hard to tell initially that you’ve established a new withholding. But if you drill down on the site, there is a link for “sources” where it breaks out 401k, catchup contributions if you make those, Roth 401k, and 401a separately.)

Once there is money going into the 401a, then you call Fidelity and tell them you want an “in plan conversion” so that the 401a money is treated like a Roth account, the benefit being that while you have been taxed on the amount you contributed, you don’t pay tax on the earnings on the contributed funds. “In plan conversion” are the magic words. Also note there is a special 401a group at Fidelity to whom you’ll be transferred when you call.

If you don’t call for the in plan conversion, effectively all you have with the 401a is a taxable brokerage account that is funded with automatic paycheck withdrawals, under the umbrella of the retirement plan.

The ALPA volunteers who assist with retirement issues can help. When I submitted a DART they got back with me quickly and were great.

I know, I know, never talk finances with a pilot, but I keep seeing 401(a) mentioned. How does that apply to us because everything I see says it’s for no -profits, government, and such.

It's after tax contributions to your 401k. You can put more than the 24.5k personal limit. Then convert it to Roth. Or, better yet roll it to a self-directed Roth IRA.

Worth noting is the automatic conversions are only to the Roth 401(k). If you want to move those contributions to a Roth IRA as I understand it you have to call them each and every deposit.