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I am making both after tax (with roth rollover) and pretax contributions to my fidelity 401k. I see a single balance for all my contributions. How does it separate tax free and taxed capital gains in future? Even dividends are being reinvested in the combined account. Is there a way to see what part of my balance is growing tax free and what part is taxed?
I have been wondering the same thing for a while now but haven't had a chance to look into it. Following this thread
Fidelity, vanguard both did the same for me. The best is to rollover all of your after tax contribution to roth ira as soon as it hits your 401k. This is called mega backdoor roth. And roth IRA is better than roth 401k. Easier withdrawal and separate account than your traditional pretax 401k. So you get to manage that on your own.
Can you explain about mega backdoor Roth? Does your savings get taxed when you rollover from traditional 401k to Roth ira? Also what are the withdrawal fees like from Roth ira?
It has to be supported by your employer plan. Microsoft plan supports it. After tax contribution can be rolled over without any tax. If you already have some gains on your after tax traditional 401k contribution, that gain will be taxed during roth ira rollover. Withdrawal on roth ira is much easier. Principal portions can be withdrawn freely after 5 years. Do not need to wait for retirement. Roth ira and roth 401k has mostly similar policies, but withdrawal easier on ira and the selection of stocks,etfs,mfs you can buy is much wider and under your control than roth 401k.
There is a page in netbenefit where you can see the break down. You have to click under detail button right below pie chart by Sources. Ive figured this out yesterday.
Thanks. I spoke to a rep a few days ago and he confirmed MSFT plan does track all the various groupings (pre tax contributions, pre tax earnings, after tax contributions, after tax earnings) My question is: since MSFT plan offers "in plan Roth conversion" for the after tax contribution, is it necessary to call Fidelity to move that Roth 401k amount to Roth IRA immediately, or just do it once a year, or maybe just if/when we leave company? I believe that rollover not inhibited by 5yr rule as long the Roth IRA you roll into has its own 5 yr status, right?
what did u do for this? I am in the same boat, now wondering if u can cut paste Roth part from mixed mode 401k pretax+ 401k Roth account to Roth IRA without involving any taxable event / pro-rata rule etc.
Go to summary from quick actions and scroll down to the sources pie chart. Click show details. Gains will be Balance - Net Contributions
I've been wondering this as well. Fidelity's UI/UX is kinda shit