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Thoughts on Jumia stock?
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Bowl Leader
Just a reminder that $70k limit you referenced is inclusive of your $23,500 Roth contributions, employer contributions, then after tax so the total available for after tax is likely under $40k, not the $70k you quoted. I believe some companies limit this further ($15k?)
To answer your question it depends on where you want the money and how your company's MBDR conversion works. It can be a hassle to convert and roll out to IRA (phone calls, mailed checks, weeks to process). If it is in plan Roth rollover and stays in 401k that is likely the simplest and quickest.
I think I'd still do the backdoor Roth in your situation if you don't have any trad IRA balances that might make it partially taxable. It isn't a difficult process at most brokerages and gives you more flexibility.
Bowl Leader
Are you mega backdooring into Roth IRA or in plan Roth rollover 401k? I believe term applies to both options.
If the latter, you might derive some benefit from it being in IRA instead if you are working towards a preferred rewards program that requires a certain amount of assets but excludes 401k. It is also easier to pull contributions later in life (tax free) from IRA and you have more investment options. 401k offers better asset protection in some states.
The Roth IRA is better than mega back door Roth 401k because it doesn't have the 5 year rule. If you can do both then that is worth doing also.
My plan is:
Max hsa - 4.1k
Max Roth IRA - 7k
Max Pre-Tax 401k - 22.5k
Rest into megabackdoor 401k - 70k minus 22.5k
Aprx 81k total
Conversation Starter
This makes sense, thank you
What trouble is it? Why would you not want as much as you can get in Roth? If you can’t afford to do it, that is fine, but if you can, do it.
Because you can access Roth IRA contributions before 59.5 without penalties in an emergency. You have more investment options usually. May or may not have lower fees on Ira. Generally just give you a little more flexibility