Do you know that 401k Roth is not the same as 401k after tax?
I thought 401k after tax is the same as 401k Roth, but I found out later, 401k after tax means that any further gain is subject to tax, while 401k Roth means further gain is not subject to tax.
So the 401k pre tax and 401k after tax only differ by whether you pay some tax now...
For some reason, I was supposed to have more money in the Roth portion instead of the "after tax" portion, but last I checked, only about 1/6 of my 401k is in Roth. The other is in after tax. They said if I transfer over to Roth, I'd have to pay tax for the gain so far. So that means we have to keep on converting to Roth the moment we get it in after tax when we get new money into 401k? That is so complicated.
I planed to take them out when my tax bracket is near 0 when I retire after 60 or 65, but the Fidelity workplace planner told me when I get social security, then it is easy to go over the limit for 0 tax.
Poll:
TC: 390k
comments
Not sure what your gains or current tax rate is, but may very well be still best to do the conversion and pay the tax. Perhaps you can discuss with the brokerage if anything can be recharacterized, but I'm guessing not since you are sitting on those gains
I'm new to investing.
One of those cases where what you don't know can hurt you