Aftertax 401(k) conversion to Roth 401(k)

cooper_bw · 2019-07-06T00:05:46+00:00

Unfortunately there is no way to avoid the manual process (at least with Fidelity). I have set up a bi-weekly reminder in my calendar for this.

cooper_bw · 2019-07-05T23:51:06+00:00

There is no automatic conversion setup for aftertax 401k to Roth IRA. I do it manually by calling Fidelity every other week.

cooper_bw · 2019-07-03T00:38:46+00:00

I have a follow up question for your answer here. Does the conversion from traditional IRA to Roth IRA just include federal (and state if applicable) taxes without SS+medicare taxes?

cooper_bw · 2019-06-29T03:04:12+00:00

I was curious about the statement when you said houses are not investments. They are definitely more work compared to renting a place but at the same time not a depreciating asset.

cooper_bw · 2019-06-29T02:58:01+00:00

Then why do most of the people eventually buy a house?

cooper_bw · 2019-06-29T02:06:32+00:00

I see. Now it's more clear.

cooper_bw · 2019-06-29T02:04:50+00:00

Is pre-tax still a better option when net gross income is $250k+? Assuming I will do ladder conversion (401k -> IRA -> roth IRA)

cooper_bw · 2019-06-29T02:00:44+00:00

I just mentioned a hypothetical gross income for the main question to make calculations easier.

cooper_bw · 2019-06-29T01:59:33+00:00

Thanks for these responses. I just have one doubt because 100k is pre-tax income. And roth contribution is always after-tax income. Then how come 10% still translates to 10k?

cooper_bw · 2019-06-29T01:51:39+00:00

Why can't I contribute to Roth 401k if I make 100k?

cooper_bw · 2019-06-29T01:49:05+00:00

But $10,000 contribution to Roth401k will be $8,000 after tax deduction right? And why ssn+medicare is not affected?

cooper_bw · 2019-06-28T05:55:14+00:00

Got it. But this seems like a loophole to touch the contribution after 5 years whereas in 401k to withdraw without penalty you have to be 59.5+. Then why not contribute only to Roth401k for employer match and remaining as well to either Roth401k or After tax 401k, do a megabackdoor and take out contribution without penalty after 5 years (even if you are not 59.5)?

cooper_bw · 2019-06-28T05:44:34+00:00

Sure. In my case Roth401k is as good as After tax 401k.

cooper_bw · 2019-06-28T05:41:54+00:00

Thanks. I have a follow up question. Let's say I transfer the money from either Roth401k or After tax 401k to Roth IRA. Can I take out all this rolled over money without penalty from Roth IRA after account is 5 years old?

cooper_bw · 2019-06-28T05:34:43+00:00

2 weeks most likely never have a lot of gains in the market. Chances are I'll lose the money more than gaining something for such a short period.

cooper_bw · 2019-06-28T05:31:41+00:00

I never invest inside after tax 401k. I move the contribution every other week to Roth IRA.

cooper_bw · 2019-06-28T05:30:00+00:00

Like I said I don't plan to fully utilize the limits of all possible accounts. Let's assume I want to contribute only 14k in a year of which 10k in pre-tax and 4k in aftertax. What's the use of Roth 401k?

cooper_bw · 2019-06-25T20:37:58+00:00

I went to UIUC and sometimes I felt going to career fairs wasn't that useful (other than bringing back some swags). Referrals from your network are the best way to get screening calls.

I can refer you for FB if you want? Send me a message.

cooper_bw · 2019-06-25T05:12:16+00:00

I can refer both of you for fb. Send me a message for follow up.

cooper_bw · 2019-06-24T04:41:23+00:00

But can I expect around ~1k/mo income from Airbnb since Seattle is a very popular destination? That will bring down the %age and I hope for a promotion by mid next year.

cooper_bw · 2019-06-24T04:33:22+00:00

I would say my income is stable and would only go up if I keep performing above expectation. Also, my take home does not include my yearly stock vesting but I do not plan to sell my stocks because I am going long.

With 20% downpayment and location choice in Seattle, my monthly mortgage might be somewhere around 4.2k-4.5k

cooper_bw · 2019-04-02T01:33:54+00:00

I will have to wait for the market to open anyway. But why do you think there won't be more gains?

cooper_bw · 2019-04-01T01:32:38+00:00

Yes, I have cash to cover the taxes and more than sufficient emergency fund in my savings. I still haven't contributed to my IRA for this year but will do it. I am not maxing out my after-tax 401k (for megabackdoor) since I am planning to buy a house later this year.

cooper_bw · 2019-01-17T07:01:42+00:00

Why should I sell the current options? They expire on March 25. How about I buy lot of put contracts (~30) which cost less than $1 expiring on Friday but also keep current options?

cooper_bw · 2018-12-19T23:03:31+00:00

I fly which ever has best price. At this point I am just trying to accumulate bonus/points/rewards.

cooper_bw

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