Hey Chris, see the comments above for more info on TSPs. If you are a Highly Compensated Employee (HCE), by IRS definition, a retirement plan needs to perform ACP testing on the after-tax contribution. Your plan may have a weird provision that they don’t allow this, but I have yet to see them. It does appear to me that pro-rata does apply from reading the IRS rules (although these things seem so unecessarily complex I’m never sure): https://www.irs.gov/Retirement-Plans/Rollovers-of-After-Tax-Contributions-in-Retirement-Plans. – as a self employed person, are there options to use the in-service withdrawal to convert the after-tax 401k contribution roth ira? Watch Buceta loca de tesao video caseiro - free porn video on MecVideos By using the MB Roth conversion I can contribute up-to $36.5k to a Roth IRA which allows for investments that DO generate dividends, yield or have high turnover, without generating taxable gains. Excellent Article summarizing the options to super size retirement accounts. 2nd: HSA (which I don’t have – or at least my employer doesn’t think I have access to it) If you already have made that contribution for yourself and a spouse (if any) then you’re done. Does anyone know if the new tax bill closed this loophole? I am planning to utilize the mega backdoor IRA this year, but I want to make sure that I don’t pay extra taxes. One drawback to the TSP Roth is that, come withdrawal time, all distributions from your TSP account will be divided between your Traditional TSP and Roth TSP, in according to the percentage of each; e.g., if your account is 74% Traditional and 25% Roth, a $1,000 distribution will be $750 from Traditional, $250 from Roth. I’m unsure of the next steps that I should take or if this is even possible in my situation. I did more research on this with my custodial, Folio Investing. There are always ways to save more, but sometimes we have to be creative. I wrote this up back in 2017. Do I have to file form 8606? I have previously rolled over 401Ks into a rollover IRA and so I wasn’t sure about how to approach the MBR without getting hit with a tax. Just because you change to a “regular” full time and benefits eligible employee, doesn’t necessarily give you immediate access to a benefit. Great strategy. Not all 401(k) plans offer an after-tax source allowing for limits up to the $54000. What are the key distinctions between a rollover and a conversion? Can this be correct? Is it smart to be maxing this account given it is held at EJ? So I recently found out that Fidelity can automate the conversion when the after tax contribution is made if you roll it into a Roth managed by them. Good luck! That’s what I do. My understanding is that some who use this Mega-Backdoor Roth strategy may have the ability to place a standing order with their 401(k) administrator to roll the after-tax contribution to their Roth immediately after every paycheck. Because of these, I won’t be able to take advantage of the entire $53,000, but it’ll be better than nothing. Vanguard knew exactly how to do it without triggering any taxes. We don’t have Roth IRAs since we are not eligible- paid too much. We have both a pre-Tax and post-Tax 401K available under our plan and the plan administrator says that the total contibution limit for 2013 is 17.5K for both the plans put together and not 52K as you mention. I could just leave growing my After-tax 401(k) contributions until I decide to rollover. Is it possible to rollover all the pre-tax assets (includes the pre-tax gains of the after-tax assets) in the IRA to the pre-tax portion of the 401K? Thanks for this intel! No, rollovers are allowed for any amount and anytime. Thanks a lot! Typically it is a calendar year ending on 12/31. This is because you can max out an Individual 401K on less money, and 401K money isn't counted in the pro-rata calculation you must do when doing a regular old Backdoor Roth IRA. I understand the After-tax gains will be minimal at the time of the conversions but I just want to get a full understanding and make sure I get it right. I also set up a solo401k and it includes 3 sub accounts (solo 401k, Roth 401k, after-tax 401k). I understand that total traditional Ira funds are divided up into what % are tax deductible and what percent are not. 4. Here’s what your two IRA accounts would look like when you finally decide to take your money out: You can see that the $9,000 of gains on the after-tax contributions that would have been taxed in the suboptimal scenario are now protected in the Roth IRA and will be tax free whenever you decide to withdraw the money! The plan must allow for after-tax contributions above and beyond the $17,500 employee contribution limit, preferably up to the $52,000 limit. The plan is designed in such a fashion that all employees not excluded due to their plan status (I.e temp or seasonal or contract) receive the same benefits of the plan including matching ER contributions. What I was trying to say which is separate from above statement, is that I think (and could be wrong) it doesn’t make sense to move the PreTax-401k portion to Trad-IRA per the MF article. In fact the Fidelity employee that handled the conversion told me verbatim that the transaction would not trigger a suspension. So for 2019, I can contribute $19k and my employer will contribute until I hit the 415(c) of $56k. Doesn’t it make sense to immediately transfer this money into my roth 401k? Wouldn’t I need to convert the entire 401k though (both pre-tax and after tax) to avoid creating a problem with the pro rata rule? BB . If I contribute after tax to 401(k), when I withdraw it eventually, do they differentiate it from the rest that was contributed before tax? You can usually only ever go from SEP to SEP given the nature of the taxation and most rollover/traditional IRAs have a mix of non-deductible and deductible contributions where a lot of institutions don’t want to comingle the assets. I thought the complicated nature of this topic required a more detailed explanation so I decided to omit those comparison graphs in favor of the graphs that you see above. http://www.madfientist.com/traditional-ira-vs-roth-ira/, http://www.madfientist.com/retire-even-earlier/. Could I roll all of it into a traditional IRA and then backdoor it into a Roth IRA somehow? Your After-tax 401(k) contributions can be rolled over whenever you want. Seems like a great way to increase your Roth holdings if allowed?? Or am I stuck, and just go ahead with conversion of IRA to Roth IRA? Second Question. A couple of comments on this great article: What I would do is divide 10,000 by my weekly paycheck. Either they do a QNEC to correct and bring the NHCE deferrals and benefits more in line with the HCEs or they will remove all excess and earnings making them taxable to the employee. What about organizing the comments reddit style with upvote and downvotes so misinformation can be avoided? At the very top navigation click the “Open an account” link. Any pointers? The 2% match is more restrictive. Beyond that, the ER gets the tax deductibility of this rendering the money tax-deferred for the employees. 18K to after-tax Roth. Does this also apply to the 401(k) -> Roth IRA conversion? Anyone have recommendations on how/where to find a good accountant that can accurately deal with all this madness? My plan does in fact permit unlimited transfers of after tax contributions from my 401K to my Roth IRA by a simple phone call to Vanguard up to the maximum combined pre/post tax 401K contribution limit each year. If you max out your company 401 k (I do my personal contribution 17 with Roth 401k and the balance regular 401k)…. I went from being really excited about this possibility, to then immediately sad, as my 401k neither allows for after tax contributions or in-service withdrawals (until I am 59.5). All employees have this option. Just wanted to run this by you as, i’ve kept reading old IRS rules, old posts, so i’m not sure what is allowed. 2) These funds will be untouchable for 5 years as they’re conversions as opposed to contributions, which isn’t such a big deal for $11,000 per year, but is potentially more of an issue for $81,000. 3. Same reasons a non-deductible IRA isn’t usually worth doing unless you’re doing a backdoor Roth IRA. 2) can I withdraw the contributions without taxes or penalties (and without waiting 5 years)? You could take out money from a Pre-tax subaccount at that the same time, but most people would want to avoid that. However, instead of an employee, you are now the owner and responsible for the match and any profit-sharing contributions due to your employees. I also contribute the max to a 403b which is pretax. Would the tax benefits stop? The target for the rollover is a Traditional Ira. I’ve read several articles about the Mega Backdoor Roth IRA, and they all say the same thing. My 401K is at Vanguard along with a personal 100K Roth IRA funded since 1998-2014. So my questions would be: The rules of your 401(k) allow you to do that easily. You can just leave the pre-tax contributions and their gains in the 401k and transfer the after-tax portion to the Roth IRA. 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