Personal Investments • Re: Mega Backdoor - Post separation from employer?

I've called again today and got someone more clueful on the phone. Here's the result:

* Pre-tax 401k balance -----------------------> Rollover IRA
* Roth 401k balance --------------------------> Roth IRA
* After-tax elective/voluntary balance ----> Roth IRA
* Cap gains balance ---------------------------> Rollover IRA

This is exactly what I wanted. Should be zero tax liability as the gains were pushed into pre-tax IRA space.

Are you retired or have another 401k to roll the rollover IRA into? Cuz one thing that hasn't been mentioned yet in this thread is sending your stuff to a rollover IRA will require you to do pro-rata calculations in the future if you do backdoor Roth IRA conversions. To save this potential headache, you could opt to keep the pre-tax 401k balance and the cap gains balance in the existing 401k plan.

If the OP does the roll-over as per above, there will be no "after-tax" in the IRA to create a proration concern.

When I retired, I had some "after-tax" in my 401K which Fidelity rolled into a Roth, and the "pre-tax" went into a Roll-Over IRA. Final result -- the IRA was 100% pre-tax, no pro-rata. I did not have any 401K Roth $ as only became available the year I retired.

Statistics: Posted by RetiredAL — Mon Mar 04, 2024 9:15 pm

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