[Jason]

I’m considering whether it’s a good move for my financial planning, but I’m curious to hear from those who have actually done it. Was it worth the effort for you?

What were the pros and cons?

Did you encounter any unexpected challenges?

Your experiences and insights would be really helpful as I weigh my options.

[Tim]

Yes and yes. My previous job had Fidelity 401K and was set up to allow after tax contributions which could be immediately transferred to Roth.

I had to call to set up automatic transfers.

Once that was set up it was completely painless and I could contribute more to Roth than the normal limits.

[Rich]

Yes. I have both. Mega backdoor Roth IRA and a 401K through Fidelity. There is company matching too!

We earn too much for a regular Roth IRA so, it is great to have those options.

[Ryan]

Yes, rules and laws can change quickly depending on who’s in charge. Do it while you still can.

[Rebecca]

Yes and yes and yes I maxed it every year after I accidentally stumbled into it.

Even with having to get paper checks and mailing them to the brokerage that had my Roth IRA it was totally worth it.

That amount of money in Roth without having to give up any pretax benefits is huge.

[Wendi]

Yes, I’ve been doing it for the last 4 years. But I have access to do it via an in-service withdrawal to a Roth IRA rather than an in-plan conversion.

This article was very helpful for me for reporting it on your taxes.

He updates it each year for TurboTax, H&R Block and FreeTax USA.

Even if you don’t do your own taxes, it can help you verify your accountant is doing it correctly.

[Diana]

Yes, great place to turbo FI if you have cash flow for it. We also front load our contributions in the beginning of the year (ie paycheck= $0).

Has worked out really well for us.

[Bill]

Is it worth jumping through some hoops to avoid paying future taxes? Yeah? I means, we are talking about some really big numbers here for the megabackdoor.

Especially if you are planning on more of a fat fire retirement.

Even if you hope to stay in the 0% capital gains bracket, a brokerage account with a big balance kicks off fairly significant taxable dividends every year.

[Brian]

Yes. Definitely worth it.
Make sure you understand your plan’s rules and the steps you will need to follow with your employer and IRA custodian before you start.

I say IRA custodian because some plans allow in-service withdrawal, but not the ability to move from post-tax to Roth “in-plan.” It’s more difficult if that’s the case, but still worth it.

Also be aware about any tax filing quirks if you do have to do an inservice withdrawal.

I did it a number of years and TurboTax had a few issues getting this right on the Pennsylvania state tax filing.

I resolved them, and it’s better now.

[Rick]

Yes I have done it for a handful of years. Yes they are very much worth doing as they allow you to send your Roth balance to the moon fairly quickly.

I found the setup process a bit wonky in that my benefits team was fairly clueless, the 401k admin thought they knew how it worked, but it took a few paychecks of tweaks to get the flow right from paycheck to after tax 401k bucket to auto conversion to Roth bucket to invested in my chosen set of mutual funds.

Also, if you are able to max it out, the timing to max your base contribution (I do this pre tax) and get full company match and then the rest of the total annual max without missing out on any room for the first two can be a delicate dance.

And, at least at my company, no one was very helpful on how to math this up and time it right so I did it on an excel sheet.

And I still got it wrong the first time/year in that I didn’t leave enough room for the company match true-up (my company does this when you max the base contribution limit early in the year).

I thought I was just going to be short that money but was pleasantly surprised when around March if the next calendar year, my company sent the trueup to the 401k and the 401k sent me back money as excess contribution.

I have done a better job with the timing of all three bucket maxing since that year but it was another little gotcha and one I think company payroll and 401k admin could help and make easier.

But it would never stop me from doing this as it is such an easy way to send Roth balances to the moon.

[Wallace]

Everyone’s case is different it really depends on your numbers. If I were you I would go to new retirement and put in all of your numbers and see if it makes sense in your specific case.

If you don’t have allot in pre tax your RMD’s will probably be in a low tax bracket.

But if you’ve got 5 mill in pretax at 40 you need to get busy.

[张扬]

Totally worth it. I had the opportunity to do it at my last job but didn’t (this was before I was educated on the strategy), and regret it.

[Hannah]

Yes and Yes!
I max it out every year and on track to have it maxed out on Aug 30th!! Almost to $69,000

[Joel]

Mega-backdoor Roth 401k contributions are a huge benefit, especially if you hope to fatFIRE or just to retire at all if you started late or if you just have a lot saved in your taxable accounts generating lots of extra taxes.

[Chris]

I have done one every year in at least some measure for the last 6-7 years. I highly recommend.

Once you set them up, they’re effortless, and a great way to beat the normal limits.

[Suzanne]

Yes and yes. Every 401k plan will be a little different and has some arbitrary rules, but mine allows for immediate, automatic conversion to Roth as soon as my after tax dollars hit the account.

But my employers plan caps my after-tax contribution at 6% (which is dumb… I’m trying to get them to change that).

My husband’s plan requires him to call every time he wants to do a conversion (but he can contribute up to the after-tax federal limit).

And it’s not just the company that hosts your 401k plan… 2 different Fidelity 401k’s from 2 different employers may have different rules/limits.

So, dig into what your plan allows.

[Adam]

I do it the Monday after each pay period. It’s a very significant part of my retirement strategy and accounts for about 45-50% of my annual investments

[Jule]

I’ve been doing it for the last six years since I discovered it by accident as my last employer didn’t advertise it.

Love putting extra money for tax free growth. What’s not to like about it? I am so glad!

My employer allows for immediate and automatic conversions, which h is effortless on my part.

[Author]

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