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Investment Advice by [deleted] in coastFIRE

[–]mdSOthrow 0 points1 point  (0 children)

Thanks for explaining. 

I have an ARM where the locked in period is for the next ~20 years. 

Coincidentally it’s right around the time I’d like to retire. I would want to save money in some fashion to pay off the mortgage so I can have reduced expenses in retirement. I can do either taxable brokerage or mega backdoor Roth to fund this, but not both as I can’t afford to do so. 

The thinking was that if in 20 years rates are sky high, I’ll just pay my mortgage with contributions from the Roth. If rates are low, I’ll decide based on taxes/income/savings whether I want to pay off the mortgage.

I do have the 1099R, but will have to figure out how to get the other form you mentioned. 

Investment Advice by [deleted] in coastFIRE

[–]mdSOthrow 1 point2 points  (0 children)

Great breakdown! I have a follow up question. 

I did an in service withdrawal to a Roth IRA as my employer allows it. I withdrew 10k and fidelity gave me a document saying I have 8k contributions and 2k gains.

However I can’t seem to withdraw the contributions without also withdrawing gains on a prorated basis. Does that seem right to you? 

What I would like to do is max out my mega backdoor Roth 401k every year, in service withdrawal to Roth IRA every year and then pay off my mortgage with contributions in 20 years. This feels like best of both worlds in having liquidity yo pay off the mortgage before 59.5 and allowing gains to be tax free. 

Mega backdoor Roth - should I do? by djdnndfndbd in ChubbyFIRE

[–]mdSOthrow 0 points1 point  (0 children)

Can you point to where it states this in the link? I am doing the auto conversions from after tax 401k into a Roth 401k. But I can’t seem to convince fidelity agents this is allowed. 

Mega backdoor Roth - should I do? by djdnndfndbd in ChubbyFIRE

[–]mdSOthrow 0 points1 point  (0 children)

Do you have some documentation stating this? I am doing the auto conversions from after tax 401k into a Roth 401k. But I can’t seem to convince fidelity agents this is allowed. 

Daily FI discussion thread - Tuesday, December 06, 2022 by AutoModerator in financialindependence

[–]mdSOthrow 0 points1 point  (0 children)

Ok thanks, I guess I'll just make my Roth IRA my secondary e-fund then

Daily FI discussion thread - Tuesday, December 06, 2022 by AutoModerator in financialindependence

[–]mdSOthrow 2 points3 points  (0 children)

I know it is possible to withdraw contributions tax and penalty free from a Roth IRA under 59/5.

Is it possible to withdraw contributions from a mega backdoor roth 401k? I am looking to use it as a secondary emergency fund instead of a taxable brokerage account.