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Anyone ever done a mega backdoor?

Discussion in 'Stocks, Investments & Finances' started by dittothat, Jul 31, 2021.

  1. Jul 31, 2021 at 7:04 PM
    #1
    dittothat

    dittothat [OP] New Member

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    Anyone on here ever done a mega backdoor 401k? Have a couple emails out to my HR to see if it’s possible with our retirement plan. If so, I might give it a try. Just want to make sure I have all my I’s crossed and T’s dotted
     
  2. Jul 31, 2021 at 7:27 PM
    #2
    BTBAKER

    BTBAKER DIFFERENT NAME. SAME JUNK.

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    I thought this was something different.
    Sorry can’t answer your question.
     
  3. Jul 31, 2021 at 8:23 PM
    #3
    EAK

    EAK New Member

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    Your ability to take advantage of this strategy depends on 2 things: 1. Your 401k allows for after tax contributions. 2. Your 401k allows in service withdrawals to a Roth IRA.

    If number 1 doesn't exist, the strategy is not available. If number 1 exist but number 2 doesn't, then the strategy isn't as valuable because the earnings in the after tax bucket grows tax deferred. Annual defined contribution amounts apply.
     
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  4. Jul 31, 2021 at 8:28 PM
    #4
    Gravy

    Gravy Cat herder, ASCM #π

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    Hmmmm :monocle: And just what were you thinking it was about? *cough*
     
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  5. Jul 31, 2021 at 9:27 PM
    #5
    Dr Doobie

    Dr Doobie Growing member

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    :rofl:same thing everyone that reads the title thinks....



    ....That what she said
     
  6. Jul 31, 2021 at 9:41 PM
    #6
    CNE0207

    CNE0207 New Member

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    Totally thought this thread was headed for the deepest corners of the interwebs
     
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  7. Jul 31, 2021 at 9:50 PM
    #7
    dittothat

    dittothat [OP] New Member

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    I read somewhere (can’t remember where.. maybe nerdwallet or WCI) that if #1 exists but #2 doesn’t, that you can still do it but you have to wait until you leave that job (aka that retirement plan) and then can roll it into a Roth IRA.

    I’ll hopefully find out next week if it’s doable. From everything I’ve read, you need to have all your accounts and ducks in a row before you attempt the backdoor or you’ll get hit pretty good from the IRS
     
    Last edited: Jul 31, 2021
  8. Jul 31, 2021 at 9:53 PM
    #8
    dittothat

    dittothat [OP] New Member

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    ;)
    not sure who comes up with these loophole names, but gotta give them credit on ingenuity
     
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  9. Jul 31, 2021 at 10:05 PM
    #9
    AZTundra

    AZTundra No Longer a New Member

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    :monocle:
     
  10. Jul 31, 2021 at 10:09 PM
    #10
    dittothat

    dittothat [OP] New Member

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    Updated with IRS :thumbsup:
     
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  11. Jul 31, 2021 at 10:12 PM
    #11
    AZTundra

    AZTundra No Longer a New Member

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    Reading up on this now that I'm curious. Never heard about it before.
     
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  12. Aug 1, 2021 at 9:53 AM
    #12
    Hightide

    Hightide SSEM #88 - 3MW - ASCM #2 RGBA#Q

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    chadington von banks
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    Ok.
    My first thought.

    upload_2021-8-1_11-53-46.jpg
     
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  13. Aug 1, 2021 at 1:50 PM
    #13
    BTBAKER

    BTBAKER DIFFERENT NAME. SAME JUNK.

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    Sadly, that wasn’t my first thought.
     
  14. Aug 25, 2021 at 12:16 PM
    #14
    Kimosabe

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    I haven't done it myself but I've been thinking about it if I change jobs. I think it's pretty simple to essentially roll it over into a roth IRA. I think the main thing is be sure you're in the income requirements so that it's actually worth it.
     
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  15. Aug 25, 2021 at 12:26 PM
    #15
    Danimal86

    Danimal86 Looks clean even when its dirty!

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    With a title like this....where the hell is @hagrid
     
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  16. Aug 25, 2021 at 12:28 PM
    #16
    Kung

    Kung Dead sexy

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    Pretty sure the IRS has given us all a mega backdoor on occasion.
     
  17. Aug 25, 2021 at 12:31 PM
    #17
    Kimosabe

    Kimosabe Slacker

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    I take it back. I was thinking of just the backdoor Roth IRA.
     
  18. Aug 25, 2021 at 1:20 PM
    #18
    hagrid

    hagrid The most diverse of Diversity Hires!

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    paynuss stretchers
    Did that with a really pretty Jewish gal. Think Gal Gadot crossed with Tera Patrick.
     
  19. Aug 25, 2021 at 1:22 PM
    #19
    dittothat

    dittothat [OP] New Member

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    My company plan administrator had no idea what I was talking about. Called Fidelity and a lady confirmed that our company plan does not allow for it since we can’t do distributions. We are allowed to make contributions, and I did know about the leaving the company loophole just kinda forgot about it, so I’ll keep that in mind if I decide to go to another company. I’d be a little nervous though getting everything lined up while trying to leave a job. Especially since it’d be my first time
     
  20. Aug 25, 2021 at 3:39 PM
    #20
    Kimosabe

    Kimosabe Slacker

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    I would think there would be some time where you could get everything together. Usually the company will hold the 401k for a certain amount of time, or until you request to have it rolled over/converted. But, unless you're leaving and your company opts out of the 2 week notice then I would think you could talk to a FA or CPA and get it all together pretty quickly.
     
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