Welcome, Guest!
Back

Can I Make A Mega Backdoor Roth Contribution?

Category:
Working / Accumulation Phase, Tax Planning, Assets and Investment Planning
Blurred Flowchart

Become a Member to view.
Already a member? Login Here

In certain cases, clients may be eligible to make a Mega Backdoor Roth contribution. At a high level, this involves a client making a non-Roth, after-tax contribution to their 401(k), then rolling it out of their 401(k) into a Roth IRA. Under the right circumstances, this can allow the client to contribute tens of thousands of dollars into a Roth IRA. However, the rules are very restrictive and prohibitive for most clients, and can be difficult to navigate.

To help make the analysis easier, we have created the “Can I Make A Mega Backdoor Roth Contribution?” flowchart. It addresses some of the most common issues that arise for a client trying to make a Mega Backdoor Roth contribution. This flowchart considers:

  • The maximum amount that can be contributed
  • The impact of the ACP test
  • 401(k) plan-specific features providing in-service distributions and/or separate accounts
  • The tax impact upon rollover
  • The step-by-step process to complete this kind of contribution

 

Updated for 12/1/2022


Related Guides
Can I Make A Deductible IRA Contribution?
Category: Working / Accumulation Phase, Tax Planning, Assets and Investment Planning
Can I Do A Qualified Charitable Distribution From My IRA?
Category: Working / Accumulation Phase, Retirement / Decumulation, Tax Planning, Estate Planning, Assets and Investment Planning
Can I Contribute To My Roth IRA?
Category: Working / Accumulation Phase, Assets and Investment Planning
Should I Contribute To My Roth IRA Vs. My Traditional IRA?
Category: Working / Accumulation Phase, Assets and Investment Planning
Should I Contribute To My Roth 401(k)?
Category: Working / Accumulation Phase, Assets and Investment Planning
[class^="wpforms-"]
[class^="wpforms-"]