Mega Backdoor Roth
Which companies allow Mega Backdoor Roth? I know LinkedIn, Microsoft, Google does. Do all companies allow Mega Backdoor Roth? Also, can i contribute to Mega Backdoor Roth from my bank account, or does it have to come from salary to after-tax bucket in Fidelity, followed by moving the after-tax bucket to Roth bucket?
There is nothing any company can do for the requirement for it to come from your payroll. It's an IRS rule.
GE allows too
So what’s the process?
If your employer allows it, you can set aside up to 55000$ of your income as after tax 401k (the limit go down if you also contribute to a 401k or Roth 401k or if there is an employee match). The condition on the after tax money is all earnings on that money are taxed when withdrawn from the account but the principle is not taxable. The trick is to do a within 401k Roth conversion with the after tax money, which makes all earnings non taxable.
If I max 401K with 18.5K, plus the employer match of 9.25K, does that mean that I can contribute to Roth IRA the maximum amount of 55K-18.5K-9.25K, which is roughly 27K?
If I max 401K with 18.5K, plus the employer match of 9.25K, does that mean that I can contribute to Roth IRA the maximum amount of 55K-18.5K-9.25K, which is roughly 27K?
That’s correct. And it is called contribution to after-tax 401K. The conversion later makes it Roth.
Roth IRA has income limits.
Amazon doesn’t😭
Snap has it
Netflix has it too
Good to know, apparently many more companies than I think allow mega backdoor roth.
Apple allows it
Facebook allows it too. No you can’t contribute from your bank account, it needs to be a payroll deduction.
Can you provide details on this?