Friends,
I am aware we(or maybe it is just I) typically view 401(K) as being maxed out at $18000.00 (plus catch up provisions if they apply), however, the max contribution limit is $54,000.00 for 2017. I used to think that was only available for those inventive self-employed individuals who had very large matching or profit sharing contributions to get themselves to that dollar. However, I have recently stumbled across the term Mega backdoor Roth conversion using non-deductible contributions to a 401k. How does this work?
Maybe more importantly if my wife's employer offers the option to make Roth contributions to their 401(k) in addition to traditional contributions, can I without going through all of the paperwork gymnastics of doing a Mega Backdoor Roth conversion can I contribute the balance of the 36000 less employer match on the Roth side?
For example, her 54,000.00 would look like this:
Traditional 401k elective defferal: 18000
Employer Match:4200
Roth 401(k) contribution:13800
Total 401k additions: $54,000.00
Does this work?
I am aware we(or maybe it is just I) typically view 401(K) as being maxed out at $18000.00 (plus catch up provisions if they apply), however, the max contribution limit is $54,000.00 for 2017. I used to think that was only available for those inventive self-employed individuals who had very large matching or profit sharing contributions to get themselves to that dollar. However, I have recently stumbled across the term Mega backdoor Roth conversion using non-deductible contributions to a 401k. How does this work?
Maybe more importantly if my wife's employer offers the option to make Roth contributions to their 401(k) in addition to traditional contributions, can I without going through all of the paperwork gymnastics of doing a Mega Backdoor Roth conversion can I contribute the balance of the 36000 less employer match on the Roth side?
For example, her 54,000.00 would look like this:
Traditional 401k elective defferal: 18000
Employer Match:4200
Roth 401(k) contribution:13800
Total 401k additions: $54,000.00
Does this work?