Trying to take advantage of megabackdoor and honestly after reading the differences between Roth vs 401k and pre-tax vs roth contributions I'm still very confused.
I currently have 51k in my 401k and a ROTH in charles schwab with 6.7k. i think i set up a megabackdoor but i honestly have no idea what i'm doing.
Can someone help me and explain how best to maximize my savings and what my contribution percentage split should be?
My goal is to max out my 401k and invest the rest into index funds.
Thanks!
TC: 150k
Yoe: new grad
#personalfinance #investments
my current 401k contribution splits
comments
At your age you could be 100% in that. It’s a total stock market index fund. VTI is the ETF equivalent.
Example:
@A
19.5k - regular 401k
5k - employer match
32.5k - after tax, roll over to Roth 401k to avoid taxes on gains
@B
57k after tax contributions (employer match usually does not apply to after tax)