Hi, I have around $200k of Amazon 401k on Fidelity (80% is pretax + company match and the rest is Roth 401k as I performed after-tax to Roth 401k using In-plan conversion). As I recently move to Google, they provide 401k plan on Vanguard. I recently know about Mega backdoor. Can someone please help me double confirm if I can do the following without tax consequences: 1/ Open a new Vanguard traditional IRA and a new Vanguard Roth IRA. 2/ Max out traditional IRA this year to $6k non tax deductible using bank transfer after-tax $ from personal bank account. Then rollover 6k from traditional IRA to Roth IRA immediately. 3/ Rollover Amazon Fidelity 401k pre-tax and company match to Google Vanguard 401k plan 4/ Rollover Amazon Fidelity Roth 401k to personal newly opened Vanguard Roth IRA account 5/ amz Fidelity account balance now is zero and can be closed, all funds are in Vanguard's accounts (1 Google 401k, 1 personal Vanguard traditional IRA and 1 personal Roth Vanguard IRA) I plan to always keep personal IRA keeping only after-tax money purely for Mega backdoor purposes. Pretax money will be kept on the Google provided 401k Vanguards plan to avoid pro-data rule. But it seems that it means I will be limited to invest only one Index fund for those 401k pre-tax money. Can someone please correct me if I missed out anything TC: 450k L5 Yoe: 8
I also did Amazon -> Google this year. I think your 4) is incorrect. You should rollover the fidelity roth 401k to the vanguard roth 401k. Otherwise I think it messes up some tax things. I just did my 401k rollover last week. The pre-tax and roth 401k balances can get rolled over together
For Roth, i think it makes more sense to keep it to the Roth IRA instead of 401k IRA as it allows you to trade better. So that is why i want to move from Fidelity Roth 401k directly to personal Roth IRA instead of to Google Roth 401k.
Sure but I think due to tax rules that messes up or greatly complicates your ability to do backdoor/mega backdoor roth.
Tc or ....
Updated
#2 is a taxable event. The only other thing is there are way more than just 1 index fund.
Why it is taxable event ? I put my after tax dollars to traditional IRA and just roll it over to the Roth IRA ? If it is taxable, which part of the money is taxable ?
You said you were putting in 6k non- taxable into the traditional IRA and then roll it to the Roth. You'll have to pay tax on that 6k when you roll it into the Roth.
Dude, get an accountant
Annoying person spotted