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by sokoloff 3257 days ago
Yes, but read the "mega backdoor Roth" technique. It allows many people to effectively contribute much larger sums into Roth IRAs, even though there is a $5500 "front door" limit.

If you have a low current marginal rate and a lot of money to stash away for retirement (that might be a semi-uncommon combination), it's absolutely something to look into. I have a high marginal rate, so I haven't done it.
1 comments
rpazyaquian 3257 days ago
So it's basically opening a Trad IRA, putting money into it, then immediately rolling it into a Roth IRA? I thought the contribution limit was across all IRAs you own, so you still wouldn't be able to put any extra into the IRAs in general?

This is complicated and weird. I might hold off until I understand it better.

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sokoloff 3257 days ago
Mega backdoor Roth primer is here: http://www.madfientist.com/after-tax-contributions/

Don't get hung up/paralyzed into doing nothing for fear that something slightly better might be available if you did hundreds of hours of research. The most important thing is to get started, IMO.

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pilom 3257 days ago
Just to be clear. The Mega backdoor Roth requires a 401k that allows After-Tax Contributions. Most won't let you do that. Their software will say "that contribution percentage you have selected will result in more than $18k/year in contributions and that isn't allowed" or you'll get to the end of the year and they'll just refund you the extra contributions. Which also doesn't help you.
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