Basically Posted March 28, 2024 Posted March 28, 2024 Just a simple clarification... A client with a 5 participant 401(k) plan asked about the mega backdoor roth option. I explained that every year we max out the plan to the 415 limit, there is no room for a voluntary after tax contribution. Can she convert the PS contribution to ROTH each year with an in-plan conversion?
CuseFan Posted March 28, 2024 Posted March 28, 2024 If the plan document allows for such (or is amended for such). Bri, Luke Bailey and Lou S. 3 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
R Griffith Posted March 29, 2024 Posted March 29, 2024 You can also amend the plan to allow for ECAR (Employer Contributions as Roth) and you don't need to do the in-plan conversion. Either way, you get to the same place. The only difference is that the client will have a taxable event in the ECAR or In-Plan Conversion versus the After-tax contribution to Roth.
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