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Mega backdoor Roth question

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  • Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 1848
    Joined: 03/01/2018
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    I think most of us that have gone through the hassle and expense of getting a MBDR compatible plan established, and have moderate levels of 1099 income, already with pretax-heavy retirement accounts, forego the pretax employer contribution in favor of getting more overall dollars in the plan and capturing all that “bonus” Roth space. If it helps with the QBI deduction, all the better

    If one had higher self employment income and could make large employer contributions, and was in a higher tax bracket, they may favor pretax contributions for the immediate deduction, with strategic in plan Roth rollover when it makes sense in a particular tax year with lower income, and or during a bear market

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #214587 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 1848
    Joined: 03/01/2018

    for the benefit of the OP and others reading here, a point @spiritrider has made and I agree with would be, before pursuing a custom or semi custom solo 401k that allows for after tax contributions and Roth rollover, one should have a reasonably high level understanding of the rules and the numbers in play, or else hire a proper third party administrator who will really guide you. The likes of mysolo401k.net and discountsolo401k.com (who many have used with success, myself included) are not TPAs and will not keep you from making a mess of things if you try.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #214667 Reply
    Liked by spiritrider
    Avatar Dollingerj 
    Participant
    Status: Other Professional
    Posts: 22
    Joined: 05/03/2019

    for the benefit of the OP and others reading here, a point @spiritrider has made and I agree with would be, before pursuing a custom or semi custom solo 401k that allows for after tax contributions and Roth rollover, one should have a reasonably high level understanding of the rules and the numbers in play, or else hire a proper third party administrator who will really guide you. The likes of mysolo401k.net and discountsolo401k.com (who many have used with success, myself included) are not TPAs and will not keep you from making a mess of things if you try.

    Click to expand…

    definitely noted and probably the best bit of advice in entire thread.

    #214738 Reply

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