What do you do when you have fully maxed out your 401k contributions? This is where the Mega Backdoor Roth contributions may come into play. In this episode, we explain the mechanics behind a Mega Backdoor Roth contribution and how to approach this move strategically so you never have to pay taxes on that contribution again.

Time Stamps:

Introduction - 00:05

Listener question – 00:55

What is a Mega Backdoor Roth – 01:18

Does this make sense for you – 3:00

How do you drive down taxable income – 4:02

What is the quality of your 401k plan – 5:50

The mechanics of a Mega Backdoor Roth – 8:02

How much can you contribute to after-tax contributions – 10:13

The two components of after-tax buckets – 11:33

Where the Mega Backdoor Roth comes in – 12:43

In service Roth conversion – 13:03

Plans that allow in-service distributions – 14:18

Plans that do in-service conversions – 14:43

Conclusion – 17:23

 

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James

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