For purposes of the pro rata rule, are 401k's a separate category from IRAs? In other words, if you convert a traditional 401k to a Roth 401k, does the pro rata rule impact your traditional IRA?
I started a new job this year and the 401k allows after tax contributions, and has both traditional and Roth options. My plan is to contribute the max of $30,500 to a traditional 401k, and there is a 50% employer match, taking that to $45,750. Then I plan on contributing $30,750 in after-tax dollars to the traditional 401k, thereby reaching the maximum of $76,500. Then convert that to a Roth 401k. Of course, I don't want to trigger the pro rata rule, because I have a considerable traditional IRA. Does that plan work?
I started a new job this year and the 401k allows after tax contributions, and has both traditional and Roth options. My plan is to contribute the max of $30,500 to a traditional 401k, and there is a 50% employer match, taking that to $45,750. Then I plan on contributing $30,750 in after-tax dollars to the traditional 401k, thereby reaching the maximum of $76,500. Then convert that to a Roth 401k. Of course, I don't want to trigger the pro rata rule, because I have a considerable traditional IRA. Does that plan work?
Statistics: Posted by WestCoastPhan — Sun May 19, 2024 1:05 pm — Replies 4 — Views 210