$3.5 Trillion doesn’t just grow on trees!
 

https://www.cnbc.com/2021/09/13/hous...e-wealthy.html

Not good for many of us…

”Democrats’ legislation would end the mega-backdoor Roth by prohibiting all after-tax contributions in workplace plans and prohibiting after-tax IRA contributions from being converted to a Roth account.”

These changes are for people making over $400k single filer or $450k joint and with over $10 million in retirement. I’m guessing that’s next to nobody frequenting these forums. In any event, unlikely to pass.

There were some provisions in there about after-tax contributions that are converted to Roth designation, regardless of income. That would affect a lot of people here.


Sent from my iPhone using Tapatalk

… and it actually affects the younger crowd the most since they have the largest amount to contribute to the PRAP after-tax.

”Furthermore, this section prohibits all employee after-tax contributions in qualified plans and prohibits after-tax IRA contributions from being converted to Roth regardless of income level, effective for distributions, transfers, and contributions made after December 31, 2021.”

Eh, that part is of little importantance to me as there are better strategies than after-tax 401k contributions. The alarmist part (which applies to almost nobody) was saying it ends backdoor roth. In any event, no point in arguing over it because it’s unlikely to get traction; however, it made for some great clickbait nonsense that most only read a subject line about.

The ability to save up to 58k in your 401K by making after-tax contributions and subsequently converting those dollars to Roth (if your plan offers that option) is a huge benefit and advantage.


Sent from my iPhone using Tapatalk

I didn’t say it wasn’t.

Let’s have another multi-page thread over nothing though. 🍿

One could make an inference that you don’t think it’s a huge benefit. Otherwise, why would you regard the loss of a huge tax benefit as “of little importance?” In any case, what is a better strategy than having many thousands of dollars contributed every year, and growing tax free?


Sent from my iPhone using Tapatalk

Maybe you do have better strategies, I’d love to hear them. I’ve been investing since I got a paycheck; putting tens of thousands of dollars a year into an after-tax 401k that is immediately rolled into a Roth 401k (offering zero future taxes on all of it) is an unbelievably powerful way to build massive tax-free wealth…. Ummmm, perhaps this is why the pols want to end the practice (duh)?

Not really clickbait, read the article - it applies to every non first-year pilot (and some of us when we were first-year). This provision (as quoted) is not limited to income >$400k, the specific mega backdoor section bans ALL after-tax contributions…

It may not pass (I sure hope it doesn’t) but being aware that’s it’s in the bill should get your attention, at least a little bit.

It applies to almost everyone here. They would end the ability to do it at all income levels. The only people it wouldn’t apply to are the few that have income levels low enough to contribute to a Roth IRA directly.