Are megabackdoor roth amounts considered contributions that you can withdraw any time tax free?

like
Posting as :
works at
You are currently posting as works at

They are not contributions. They are conversions. They are potentially non taxable conversions. There is a penalty on withdrawal of taxable conversions before 5 years. You need to look at withdrawal ordering rules

like

I don’t have a traditional IRA. I only have a rollover IRa where small amounts are that accumulated on the megabackdoor conversions. I cleared out the rollover account in case I do a backdoor Roth this year.

like

You actually ask a great question. If the mega back door conversion happens in your workplace Roth 401(k), even with the five-year rule they’ll be a pro rata rule when you take out the principal. if you were able to transfer the mega back door from your workplace after tax account to a Roth IRA outside of your 401(k), you will just need to abide by the five year holding role. Feel free to DM me if you want discussion. I am a CFP.

like

My work allowed me to transfer after tax 401k to my Roth IRA. So once the 5 years have passed, can I withdraw those any time tax free? No need to do a ladder?

I think this is from Ed Slott's 2021 book The New Retirement Savings Time Bomb.

Post Photo

Related Posts

Newbie to investing. What are good online courses / books to get smart on investing?

like

If I want to finance a private party purchase with a car loan from a credit union, how does it work from a tactical perspective. Say I’m looking to purchase a car in the $15-20k range - my credit is good and my local CU offers 2.5% for 48 months, so it’s smart to use financing since the cash is so cheap.

How much do I get approved for? Do they just wire me the cash and I bring them the title later or do they issue a cashiers check to the seller for the exact vehicle I’m buying?

like

Why is IOB bank asking to check CIBIL score when I'm trying to open proprietor current account there?

I don't remember getting it checked by HDFC Bank when I opened proprietor account there.

Or does every bank checks your CIBIL score before opening current account?

like

How many of you do not have a single credit card?

like

Deloitte folks: Does our 401k plan allow after tax contributions to the 401k - after the 26500 ($20500 401k + 6000 IRA)?

like

Do you think I can count on Social Security money after I retire or it will be gone?
Real question, since I'm new to the US and am planning my retirement money.
Thanks!

like

I would love all opinions: My current base is 120k (I never budget with bonus to be safe). Total debt is $650 per month for student loans. I’m currently paying 1k for rent but hate the place. I found a great place but rent would jump to 1.6k for my half of a 2b2b. I’m struggling to justify the large increase, is this rent unreasonable for my salary?

like

I feel like I have no idea what I am doing when investing in stocks/real estate. Any recommended books/videos? Thank you

like

Chase Sapphire Preferred or Amex Gold rn?? I see amex gold offer expiring tomorrow, anyone have insight into what next offer might be?

like

I heard someone make a bold statement that contributing to a traditional 401k versus a Roth 401k were the exact same assuming the same tax rate. I ran the numbers and to my surprise they were not wrong (even considering the earnings). Can anyone explain why a Roth would ever make sense given that income will likely be lower and therefore lower tax rate in retirement?

like

What are people doing in terms of stashing money away for your first house? I want to buy within the next 3 years and I'm looking for any type of budget tips, credit card recommendations, safe and solid bank loans, or whatever you did that worked. Thanks!

like

Hi - any good books recommendations for getting started on real estate investing?

like

My father took a home loan, and the same home is kept as mortgage.
I'm paying arround 22k emi for the same but unable to exempt tax as the loan is on my father's name.

I googled a lot how to transfer it but neither gift deed nor sale deed would work as the property is on mortgage that's under bank's ownership (until loan is fulfilled).
Tax is also getting deducted, I'm paying hefty emis.
What can I do?
Please advise 🙂

likefunny

If you were interviewing for a hedge fund, how would you explain your approach to evaluating a potential investment?

Anyone have recommendations on 401k administration and visa process education or certification programs? I know bare minimum on both and really want to up my game. TIA!

like

Can I open a vanguard IRA and put in upto 6k for 2019? Will I get tax advantage on that amount? My pretax was 160k and I ended up with just 13k in 401k.

like

If you think a house is way overpriced, can you offer 15% below asking? I’m embarrassed to even ask my real estate agent but this house has been listed at $440k for 90 days and their is a comp right next door that is much better for $380k (top end of my budget). I went to their open house and the selling agent said we were the only ones who showed up.

like

Get the SPG card now or wait until the new SPG Amex releases?

like

More Posts

Confirmed layoffs at Saul Goodman & Associates.

likefunny

Anyone looking for 2bhk in Bangalore city near Deloitte usi office I will be moving this month?

Any suggestions broker contacts etc?

like

Does anyone know how the GSAP technology subsidy works? Do I need to wait until after I leave Deloitte to buy a computer? Do I have to submit any documentation for what the subsidy is spent on?

like

Usually I try to live in the moment, but other times things come to mind from the past that make my life feel like it could be a soap opera. For example, I crushed on a guy from school for a few years, and one night as a young adult, found us both drunk alone in my apartment. A few months later he texted me and said he just got married at the courthouse and that I should be in the wedding party when covid was over. It shouldve happened by now but it hasnt yet…👀🙂

likefunny

Hi sharks 🦈🦈 I recently switched from PwC India to IBM & hence need to transfer my PF to IBM.

Can anyone tell me who is to transfer the PF when someone is switching from PwC India?

At first the PwC India finance team told me that it needs to be approved by RPFC(Government).

Then when I said that in EPFO portal, it shows- 'Pending at previous employer', then they said fine we will approve it & they approved.

Can anyone tell me the actual process who had to get this transfer done ??

like
like

What’s the salary range for managing director at Navigant or FTI consulting in healthcare.

like

Which offer will you take?
Senior consultant
SAP Vs Sap Manager PwC

Expecting offer from both the companies. Based on my salary research, PWC may offer $10k more for the job title role.

How are the Projects in PwC ?
How are the WLB and growth opportunities in both the companies?
I have I140 based visa. When do you restart the process?

Your suggestions please.

like

I'm noticing there is an increasing amount of discrepancy between a DSP and an Ad Server. The DSP is delivering in full while the Ad Server is not - showing about a 20%+ difference. Is anyone running into this issue and/or have a solve? Obviously this is hurting the sellers.

like

Are there any onsite opportunities in jp morgan ?

Investing is more fun when stocks go up.

likefunnysmartuplifting

So is everyone planning to move out of NYC after this?

like

Anyone have insight into in-house roles at an insurance company?

like

85k salary as a senior at a regional accounting firm in south florida is that market rate for PCS group? I was told even 90k in this market is reasonable.

like

I am currently at a firm and received an in-house offer. Aside from main items like comp and big ticket benefits like PTO/health insurance/401k, what other items do I need to think about discussing/negotiating? For example, fees to keep bar licensure, professional association fees, CLEs, etc. I feel like there is so much on that end I currently take for granted being covered at my firm. Anything else I should consider?

like
like

Leaving NYC to be with family during a difficult time. Best/cheapest way to move from NYC to DC area? Assuming cross-state movers would be ridiculously expensive

like

Is there a difference between building tension around a customer problem in a deck and straight up fear mongering?

like

Pokemon Go is dangerous...I knew it..

like

Hey fishes, i am an assistant professor in MBA, with 5 years of experience i want to change the domain and company. What's the best way to switch domains.

Additional Posts in Personal Investment Chatter

Drawbacks of using blockfi to put 5-10k? Other then it’s crypto (volatile and non disc)

like

Crypto newbie. Would you buy dogecoin with it being so low right now?

funny

24, a decent amount of savings in the bank. I’m sort of interested in buying a property in the next few years.
Is this a good or bad idea? I live in Ny area, so obviously the city would probably be too expensive to buy any property. Would probably have to buy further out in westchester, Long Island, maybe connecticut or NJ. If I buy, should I be living there? Or should I rent it out until I’m ready to live there (assuming it’s a bit further from the city). Very early stages of just thinking

like

Quick question - Is the Roth IRA contribution cut off based on pre or post tax income? I.e, <$129K post tax for single filers?

like

Roboadvisor recommendations for personal investing/any experience with SoFi’s robo advisor?

Investing is more fun when stocks go up.

likefunnysmartuplifting

I recently got a new job that now exceeds the $129,000 limit to be qualified for roth IRA. The company confirmed they have traditional and roth 401k, but do not support any other backdoors. Is my best bet here then to roll over from Roth IRA into Roth 401k, or keep the IRA as is but not invest more?

Goal right now is to save as much as I can and max out within 3y for marriage/kids (been already maxing out 401ks throughout career, and recently HSA until the new job, in which I will have an FSA)

like

What trading platform (not RobinHood or Webull) can one set up automatic investments in ETFs and/or stocks?

Fidelity, Vanguard can do this but only with mutual funds, I am looking to set up a bi-weekly direct deposit + automatically investing in different ETFs/stocks. Any suggestions?

like

Real talk, does this mean that gas stations will pay me to fill my gas tank? 😂

like
like

Deloitte folks: Does our 401k plan allow after tax contributions to the 401k - after the 26500 ($20500 401k + 6000 IRA)?

like

Does anyone feel resentment that their parents don’t have a proper retirement plan? My parents were immigrants so it took them a long time to get good jobs and save money. I’m grateful they provided a lot for me but also feel an incredible amount of burden. Does anyone have tips or advice?

like

I feel like I have no idea what I am doing when investing in stocks/real estate. Any recommended books/videos? Thank you

like

which is the best mortgage option
All conventional 30 year fixed

3.325, PMI, 10k closing
3.875, no PMI, 18k closing
4.375, no PMI, 10k closing

like

Chase Sapphire Preferred or Amex Gold rn?? I see amex gold offer expiring tomorrow, anyone have insight into what next offer might be?

like

Can I open a vanguard IRA and put in upto 6k for 2019? Will I get tax advantage on that amount? My pretax was 160k and I ended up with just 13k in 401k.

like

How much do you all contribute to your 401k? What % of gross income?

like