Can I Make A Mega Backdoor Roth Contribution?

Already a Member? Login

GUIDES

All Guides

Updated 12/1/2023

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

Become a Member

View Sample

Related Guides

Can I Make A Deductible IRA Contribution?

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

Can I Do A Qualified Charitable Distribution From My IRA?

Category: Working / Accumulation Phase, Retirement / Decumulation, Tax Planning, Estate Planning, Assets and Investment Planning, General

Can I Make A Backdoor Roth IRA Contribution?

Category: Working / Accumulation Phase, Assets and Investment Planning, General

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, Tax Planning, Assets and Investment Planning, General

Should I Contribute To My Roth 401(k)?

Category: Working / Accumulation Phase, Assets and Investment Planning

Getting Your Referral Stats

“This has been super helpful and I am getting rave reviews in using these flowcharts and checklists”

— Christoper, an advisor in Illinois

“I think fpPathfinder is the best tool I’ve ever seen in the financial planning realm. I spend an unbelievable amount of time researching some of these issues that have been boiled down to one page: consulting with other experts, citing specific sources as a backup, reviewing my work, and coming to a final conclusion.”

— Jeff S, an advisor in Missouri

“I had my own internal set of workflows, but by piggybacking fpPathfinder, I've saved who knows how many hours. It's a great product and I'll be a subscriber for years.”

— An advisor in Texas

“Your software and platform are awesome and super helpful to me and my clients”

— Clinton, an Advisor in New York

“I find the flowcharts and checklists helpful for content and for presenting topics to clients. It is a streamlined approach to presenting information and while complex, it also demonstrates the value the advisor brings to the client in helping them navigate these complex situations.”

— An Advisor from California

“This is probably the best money I have ever spent. I love fpPathfinder!”

— Phillip, an advisor in North Carolina

“I just met with a client who had a question regarding her eligibility for Social Security benefits. We went through the flowcharts answering each question and following the lines. She looked at me and said 'This is great, it was so much easier to use this than trying to go through all the literature that Social Security offers. Thank you so much.'”

— Ben G, an advisor in Wisconsin

Congrats!

Welcome Aboard!

Account Set-up

Tailor Your Experience

Congrats!