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So since this original discussion was about a 401k, I feel I should point out that you can't just pull out contributions whenever you want from a Roth 401k like you can with a Roth IRA.
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Jul 30, 2019 14:05
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Hoodwinker posted:So since this original discussion was about a 401k, I feel I should point out that you can't just pull out contributions whenever you want from a Roth 401k like you can with a Roth IRA. Ah, that's my bad. I assumed the rules were the same as a Roth IRA.
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Jul 30, 2019 14:18
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The only real benefit of doing Roth 401k is for the tax treatment, and really unless you're in the 12% tax bracket now you should probably just do Traditional 401k/Roth IRA so you get to hedge your bets on tax rates down the line.
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Jul 30, 2019 14:20
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Hoodwinker posted:So since this original discussion was about a 401k, I feel I should point out that you can't just pull out contributions whenever you want from a Roth 401k like you can with a Roth IRA. I believe there is a rollover method, but takes 5 years. Like, roll over contributions to a roth IRA, season for 5, then you can pull it out before retirement. I don't recall the details because it's just not terribly relevant for me. Potentially very relevant to someone retiring early that had loaded a lot into Roth though.
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Jul 30, 2019 16:47
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Motronic posted:I believe there is a rollover method, but takes 5 years. Like, roll over contributions to a roth IRA, season for 5, then you can pull it out before retirement. I don't recall the details because it's just not terribly relevant for me. Potentially very relevant to someone retiring early that had loaded a lot into Roth though.
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Jul 30, 2019 16:54
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 This is my first contribution to Fidelity's Tax Loophole Extravaganza and I'm far more excited than I ought to be. If you have a Fidelity 401k nag your administrator to add this feature to your account!
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Jul 30, 2019 17:36
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H110Hawk posted:Fidelity's Tax Loophole Extravaganza I would like to know more.
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Jul 30, 2019 17:55
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It's the Roth 401k backdoor, right? Same as with IRAs, you can contribute after tax money and then in-plan convert it to the Roth account. It bypasses the $19k annual limit, letting you contribute up to the total limit ($56k?) less any employer match.
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Jul 30, 2019 18:01
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Loucks posted:I would like to know more. Solumin posted:It's the Roth 401k backdoor, right? Same as with IRAs, you can contribute after tax money and then in-plan convert it to the Roth account. It bypasses the $19k annual limit, letting you contribute up to the total limit ($56k?) less any employer match. This! It's all automatic once you call in and agree to their terms to set it up. (And yes, Call.) If you want to learn more google "Mega-backdoor roth 401k" or similar terms. Just make sure how your employer will treat you hitting the max in relation to your employer match. Ours just told us to do Return of Excess's every year because they're cool like that and or legally required to I don't actually know.
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Jul 30, 2019 18:16
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Are you sure you can mega backdoor Roth 401k? I thought once it's in a Roth 401k, it's stuck there. Normally mega backdoor is contributing to non-Roth after-tax (i.e. taxable contribution, taxable growth) and then doing the in-plan conversion to Roth IRA. My new employer is, in fact, under Fidelity so thanks for the tip! This bodes well and gives me more hope to ask.
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Jul 30, 2019 18:42
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facepalmolive posted:Are you sure you can mega backdoor Roth 401k? I thought once it's in a Roth 401k, it's stuck there. Look very closely at the screenshot I provided. That is all the same day, same dollars.
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Jul 30, 2019 18:59
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facepalmolive posted:Are you sure you can mega backdoor Roth 401k? I thought once it's in a Roth 401k, it's stuck there. Yes, it's exactly as you say. Vanguard sets it up as an after tax account in the same 401k plan, then transfers to the Roth 401k account as an in-plan conversion. Also, a point for people considering traditional 401k vs Roth 401k: all employer contributions go in a traditional account no matter what. (Because tax isn't paid on the contributions at that time.) So if you choose Roth contributions, you will have both a Roth and a traditional account in your plan.
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Jul 30, 2019 21:15
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Seems like we should always be Roth 401k -> Roth IRA backdoor..ing... since IRA has better fund options/rates like 99.9% of the time, right? Edit: I forget, do you need to have quit your current employer in order to make transfers on the 401k funds or can you do it frequently? I have many dollars in roth 401k that I'd rather have in roth ira eventually for all sorts of reasons (early withdrawal isn't expected but might as well gain the option, & current fund plans in 401k are great but maybe they'll be worse later, etc.)
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Jul 30, 2019 22:03
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Blinky2099 posted:Seems like we should always be Roth 401k -> Roth IRA backdoor..ing... since IRA has better fund options/rates like 99.9% of the time, right?
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Jul 30, 2019 22:05
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Hoodwinker posted:Some employers let you do in-service rollovers but my understanding is that many don't. Unfortunately, this is the case IME as well.
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Jul 30, 2019 22:18
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I’m doing the mega back door roth, and quarterly I’ve rolled the funds into my vanguard. Easy peasy. In case you’re wondering what the process looks like, I found this article helpful: https://www.madfientist.com/after-tax-contributions
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Jul 30, 2019 23:19
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Blinky2099 posted:Seems like we should always be Roth 401k -> Roth IRA backdoor..ing... since IRA has better fund options/rates like 99.9% of the time, right? There are a growing number of employers who have pretty good options, mine is one of them. This is specifically me making "After-Tax but Not Roth" contributions and them automatically doing an "In-Service Rollover" to a Roth 401k balance. This is money after I've made my $19k of Traditional contributions. I'm above all IRA limits and my Traditional balance is all kinds of hosed up so I can't do any kind of backdoor IRA until I take the time to unfuck that. Either way, this is higher than the IRA limits and automatic.
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Jul 30, 2019 23:49
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H110Hawk posted:
Assuming you’d have enough to backdoor if you could, what are you doing instead? I talked to my wife about our options as described upthread and she said it was all too frustrating, can’t find tax returns from up to 12 years ago when she was depositing after-tax dollars in her rollover IRA, no idea how much is pretax/post tax, etc and just got pissed about the whole thing. She just said she wants to do whatever’s easiest. We’re already both maxing 401ks and I can backdoor my Roth. It’s an argument I don’t feel like having, so we’ll have the $6,000 we earmarked for her Roth and can’t put it in a Roth as well be over the limit and she doesn’t want to bother figuring out how much is pre/post tax, so we’re trying to figure out what to do with it.
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Jul 31, 2019 00:04
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I think you guys will be ok. You can just dump it in a taxable account. Make sure your HSA is maxed if you have one.
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Jul 31, 2019 00:10
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Ah, my bad. I didn't realize you were doing after tax 401k -> Roth 401k. Thought you were going Roth 401k -> Roth IRA, which I didn't think was possible.Blinky2099 posted:Seems like we should always be Roth 401k -> Roth IRA backdoor..ing... since IRA has better fund options/rates like 99.9% of the time, right? Sorry, this is what I meant by 'I don't think you can do this'. I don't think you can take/convert out Roth 401k dollars while you're still with the company? Some plans allow you to take money out of your after-tax-but-not-Roth 401k while still with the company (this is the 'non-hardship' 'in-service' withdrawals stuff that I need to talk to my company into allowing). Then you can do your after-tax-but-not-Roth 401k -> Roth IRA for megabackdoor goodness. Also IIRC Roth 401k has RMDs once you hit 70ish or whatever, but Roth IRAs do not. I have also read somewhere that one benefit to a 401k vs. an IRA, is that an IRA is tied to you whereas 401k is technically administered by your company. That way if you get sued or your poo poo repossessed or something (and let's face it, none of us are ever planning to get sued), they can go after your IRA (because it's one of your assets), but it's much harder to go after your 401k.
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Jul 31, 2019 00:39
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Cacafuego posted:Assuming you’d have enough to backdoor if you could, what are you doing instead? You can request tax transcripts online from the IRS. It in theory has the information you need. I'm going back and forth on hiring a CPA to handle it for me. If they don't go back far enough you can mail them forms. The "non-deductible IRA" line is always $0 so you would have to lookup the MAGI stuff from then. If you've been making the contributions non-deductible for exactly X number of years and always hit the max, you could just lookup the maxes from each year and go with that. I dump extra money into taxable. Though at $56k/year in retirement savings I'm OK with it.
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Jul 31, 2019 00:39
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facepalmolive posted:That way if you get sued or your poo poo repossessed or something (and let's face it, none of us are ever planning to get sued), they can go after your IRA (because it's one of your assets), but it's much harder to go after your 401k.
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Jul 31, 2019 00:42
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Blinky2099 posted:OK change of plans thread how do I convert the entirity of my Roth IRA into my Roth 401k please reply quickly someone is at my door right now Just peep out behind the blinds and be very quite.
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Jul 31, 2019 01:08
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H110Hawk posted:You can request tax transcripts online from the IRS. It in theory has the information you need. I'm going back and forth on hiring a CPA to handle it for me. If they don't go back far enough you can mail them forms. The "non-deductible IRA" line is always $0 so you would have to lookup the MAGI stuff from then. If you've been making the contributions non-deductible for exactly X number of years and always hit the max, you could just lookup the maxes from each year and go with that. Thanks for the info, that’s going to be too much work. I fought the good fight, we’ll just stick it in taxable and leave it there.
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Jul 31, 2019 01:49
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My partner got hired recently in the UC system and she's getting onboarded now. From what I can see they're pretty amazing in terms of their funds. I think I'll just have her invest in the 2060 glidepath, but there are some other options as well. Any reason to look any anything other than the glidepath?
El Mero Mero fucked around with this message at 04:37 on Jul 31, 2019 |
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Jul 31, 2019 04:34
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Yeah that's a great ER. Make sure there are no other catches (contribution fee / high annual management fee etc) then set it and forget it
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Jul 31, 2019 09:42
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Hoodwinker posted:Some employers let you do in-service rollovers but my understanding is that many don't. I wish mine did. Our provider is Wells Fargo and after they hosed up my first mortgage, and the duplicate account scandal, I don't want them holding any of my money. The only good thing is the extremely low ER. Through Wells Fargo, the 2045 target retirement fund I'm invested in has an ER of .08%. The same fund at Vanguard VTIVX has an ER of .15%
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Jul 31, 2019 13:10
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You wanna know what makes me feel like a boss? Funding my entire Roth IRA with tax-free Per-Diem income. No tax going in, no tax going out! Animal fucked around with this message at 19:23 on Jul 31, 2019 |
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Jul 31, 2019 19:20
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Animal posted:You wanna know what makes me feel like a boss? 
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Jul 31, 2019 19:28
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Animal posted:You wanna know what makes me feel like a boss? Isn't that Per-Diem income theoretically reimbursing your for out of pocket (aka taxed) expenses they expect you to have for doing a given job? I realize you might not spend it all.
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Jul 31, 2019 19:29
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H110Hawk posted:Isn't that Per-Diem income theoretically reimbursing your for out of pocket (aka taxed) expenses they expect you to have for doing a given job? I realize you might not spend it all. Yep. I’m a flight crew, and get paid $2.40 an hour for each hour I am away from home for meals and what not. I only use about half of that and the rest goes straight into the Roth. I realize that money is fungible and it makes no difference which part of my paycheck is going straight to Vanguard but shut up I don’t wanna hear it.
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Jul 31, 2019 19:46
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Animal posted:Yep. I’m a flight crew, and get paid $2.40 an hour for each hour I am away from home for meals and what not. I only use about half of that and the rest goes straight into the Roth. I mean it's definitely the smart thing to do, especially if you get $6k in per-diem you don't actually burn out the other end on food and expenses.  I used to get a small per-diem at work for traveling in lieu of actual receipts. It was great as I generally ate far less than they were reimbursing me for daily.
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Jul 31, 2019 19:54
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Aren't there rules that to pay money into a Roth it has to have been earned as income in a W2 and subject to taxation or are the rules for earned income unique for this situation?
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Jul 31, 2019 20:16
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EAT FASTER!!!!!! posted:Aren't there rules that to pay money into a Roth it has to have been earned as income in a W2 and subject to taxation or are the rules for earned income unique for this situation?  We're ruining his accounting games.
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Jul 31, 2019 20:17
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You have to have earned at least $Amount that you put in a Roth IRA, but it doesn't have to be literally the same dollar you got from a paycheck. The IRS doesn't care if you're putting Per Diem money or Paycheck Money or Sold My Pokemon Cards Money into the Roth as long as you did earn enough income that it could ostensibly be your earned income you're depositing.
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Jul 31, 2019 20:19
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EAT FASTER!!!!!! posted:Aren't there rules that to pay money into a Roth it has to have been earned as income in a W2 and subject to taxation or are the rules for earned income unique for this situation? So I pay into the Roth with my W2 money and then replace that money with my left over per-diem money what of it edit: also from pokémon cards
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Jul 31, 2019 20:19
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facepalmolive posted:Anyway, this may be a dumb question but... wouldn't I be 'better diversified' by going more heavily into international stocks? Doesn't having half my stocks in domestic mean that I'm a lot more sensitive to the whims of the US market and/or government policies? Or is the rationale that US companies make up about half of the world's publicly-traded companies, so it's just modelling that? (And if something catastrophic happens to the US, it's going to affect the rest of the world's markets anyway?) Quotin' myself because I'd still like to hear your thoughts on these two questions, especially the Admiral's-vs.-ETFs bit. I just don't know very much about ETFs, period, and every article I read seemed to be heavily pro-ETF biased, so I'm looking for the catch here.
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Jul 31, 2019 22:49
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huhu posted:I'm 27 and have an ESPP through my company. I've invested $11,000 into it over the last 6 months. I'll be able to buy stock next week at about $18 per share. The current selling price is around $30 but has been fluctuating pretty regularly between $29 and $35 over the past 6 months. We had two options, sell all of it the day you buy, or only sell enough to cover taxes. Currently, I've opted to only cover taxes. I'm hoping that it'll swing back towards the $35ish range. I was thinking of saying if it dips below $29 or hits $34 I'll sell. Am I an idiot? Should I just sell all of it ASAP? Posted this awhile back. Stock just dropped 30% today. Glad I sold.
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Jul 31, 2019 23:14
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With the Admiral shares you can buy partial shares since it’s a mutual fund. With the ETF you’d need to buy whole shares. I think M1 is the last broker who offers partial shares.
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Jul 31, 2019 23:16
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huhu posted:Posted this awhile back. Stock just dropped 30% today. Glad I sold. Goon success story! Put this in the OP.
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Jul 31, 2019 23:16
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