So I recently started a new job and the 401k plan was a particularly appealing benefit when starting since the company offers a 50% match up to the annual contribution limit. regardless I want to make sure I have all my wires correct so I can maximized a phenomenal investing opportunity at a young age.
the plan is through Schwab and has all the typical options of roth, traditional and after tax contributions. to my understanding that match would only apply to that first 23k of either roth or traditional contributions and everything after that would just be my own contributions for the after tax portion.
with the annual limit for 401ks being 69k I would assume mega backdoor for my case would look something like this.
roth/traditional -23,000
employer match - 11,500
After-tax - 34,500
additionally the "after-tax" portion allows for automatic roth conversion so in theory those fund would just be converted and added to the roth portion of my 401k with no need to be rolled to and IRA right? Schwab-s literature wasn't exactly great on that part and almost lead with the impression that somehow leaving roth converted contributions would somehow be a taxable event if not rolled out of the plan to an IRA though i think i wasn't reading into it correctly.
Submitted June 29, 2024 at 11:27PM by FluffyWarHampster https://ift.tt/bihEnML
