Answer from my financial advisor regarding ROTH backdoor

I wrote an email to my 401K financial advisor regarding the Roth backdoor rollover:

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Hello xxx

Thank you for the information provided about after-tax 401k plan my company currently has.

I keep studying this subject on the varieties of retirement plans. Based on my understanding, there are 3 types of accounts:

Pre-tax 401k(this is what I have now), 

Roth 401K(not sure if I could have this one), 

After-tax 401K(not allowed from your last email).

The question I would like to ask is:

Does my current pre-tax 401K support the following two options?

1: In-service Roth Distribution

2: In-plan Roth Conversion

My purpose is to see if I could possibly convert or rollover some fund to Roth IRA by using the backdoor.

Thank you, 

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Below is his answer a week later:

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Good morning xxxx, thank you for your patience. In response to your questions.

ROTH 401k Contributions, are not available for the plan In-service ROTH Distribution, not available In-plan ROTH Conversion, not available. At age 59.5 you can take an in-service distribution.

Although the features you are asking about are not available currently. A strategy you may want to consider is.

When you are able to (age 59.5) take the in-service distribution and move the money to your traditional IRA. Then do ROTH conversions every year up to your tax bracket. I know this is not the exact goal you want to accomplish. It could help accomplish part of your goal.

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it looks like i dont' have many options to move money into

ROTH IRA other than the annual $7000/$8000 contribution regardless if the money is pre-tax or after-tax.

I also have no idea to what side business LLC I can create to generate some income such that I can create employer 401k for myself. Any idea what else I can do?

If after-tax cash is not low, what else can I do to put

money into ROTH IRA?

你做不了每年3万的mega backdoor，因为贵司没有after-tax 401K，但总是能做每年7千的普通

backdoor。每年自己存钱到traditional IRA，7千左右，然后自己转到Roth IRA。普通backdoor和公司401K没关系。

感觉你需要搜索Solo 401K，但我没研究过，只知道有这个概念。

可以的，但是公司收入需要付FICA Tax，如果你个人的marginal tax rate 不是最高档的话，基本上大概是

breakeven，省不了税

这是啥公司呀，到现在连Roth401K plan都没有

那就更谈不上mega backdoor conversion了。

thank you for your video, I do enjoy watching it

it's really helpful for people to understand how to put money into ROTH IRA despite it does not work for my situation.

很多公司没有啊，LD公司连公司付的match都没有

that's what I thought, FICA tax might not help

in my situation.

唯一的好处是你可以做Mega backdoor了，去年投坛有很多关于这个的讨论

how? another ID 未知 says "那就更谈不上mega backdoor conversion了"

because i don't have ROTH 401k

你自己建个公司啊，然后就可以操作了

年底公司管理层有税后cash bonus, 本想放到 roth ira，看来也只能放在普通brokerage帐号

米奇太太，能不能send more info to my private message box? I really

like to know more about how to do it this way.

油管上很多啊，你狗狗solo 401k mega backdoor 就行了

got it, thank you for the direction

税后cash bonus 啥意思？ 公司给付税？

哈哈，公司401K鄙视链

第0级（最低级）：公司没有401K plan，

第1级：公司只有传统税前401K，没有公司Match 401K，

第2级：公司有税前401K，并有Match 401K，

第3级：公司有税前，Roth，和Match 401K,

第4级：公司有税前、Roth、Match、Aftertax 401K，但不支持In-plan Aftertax 401K Mega backdoor Roth conversion，

第5级（最高级）：公司有税前、Roth、Match、After Tax 401K，并且有In-plan Aftertax 401K Mega backdoor Roth conversion.

很多传统公司还停留在第1 or 2 级。有时可以向公司HR建议。

几年前，我在公司用Fidelity，但没有Aftertax401K，当然也就没有mega backdoor。我知道Fidelity的系统完全支持aftertax 401K和Mega backdoor, 就向公司HR询问建议，第二年果真就增添了，不知道是巧合不是，但相信要求的人多了，公司会考虑的，反正费用也不高。

 

LD公司以前就是0级的，后来好歹变成一级了

犹太人老板，抠门啊

"很多传统公司还停留在第1 or 2 级"--our company is at level No.2

没想道还可”增添“ upon your request. thumbs up!!!

第4级和第5级差别不大，没有In-Plan Roth Conversion就自己打电话手动转Roth IRA

"相信要求的人多了，公司会考虑的，反正费用也不高"---as far as you know, what is the

ballpack for the 费用 you mentioned? maybe I should try to ask our HR department, anyway, no harm to try.

our company use Lincoln Financial Group, migth not be as

flexiable as Fidelity.

https://www.lincolnfinancial.com/public/individuals

some cash bonus hand out by big boss

not a popular or usual way to reward employee

something similar to this

添加一个401K功能，大约几到几十美元/每年/每员工

所以比起工资和其它福利，是非常少的。多数是因为公司嫌麻烦或者HR对投资理财不懂造成的。

哈哈哈，这个好！我喜欢

不止，每个月还差不多

as you mentioned that HR might not have the necessary

knowledge for this after-tax 401K. not sure if a 401K plan provided by LFG(lincoln Financial Group) can just accept adding one or two employees upon my request or even just a few employees such that company can minimize the extra cost introduced by adding this after-tax 401K.

这种是CFO决定的

一个非常普通的benefit plan，公司需要花的setup的钱至少大约100多刀每人每月，如果员工比较多，那是不少钱

十几年前在startup做过几天HR，还负责IT，甚至办公室买桌子椅子

要加，所有employees都加，不可能只加个别员工，否则公司401K plan无法管理了

后台的软件也变得无限复杂，没有401K管理公司会这样做，IRS的规定上也不会容许。

"所有employees都加，不可能只加个别员工"---this answered

你说的没有错。我说的是，在现有的401K plan上面，扩充一个Roth或者Aftertax 可选项

也就是说从原先的100刀/人，到120刀/人。起始建立新的401K plan，则贵的多， 还有初始费几万刀 per plan。