Must I pay taxes on Backdoor Roth IRA if Trad IRA was funded with after-tax dollars? Early 50s, earning over the max for regular Roth IRA, but trying to add to retirement funds. I’m maxing out yearly contributions to my 401k (employer also matches 4%), and I’m looking to put more money away for retirement in the most beneficial way. I don’t have any IRA at the moment. So, I was considering doing Backdoor Roth. My understanding:…

Why choose Roth 401k over After-tax with Roth conversion? My 401k plan offers before-tax, Roth, and after-tax contributions. My employer will match any of these three contribution types, and the after-tax contributions can be immediately converted into Roth (mega backdoor roth – MBDR). The IRS limits in 2025 are $23.5k for combined before-tax and Roth, and $70k total including after-tax. Ignoring the b…

When is mega backdoor not recommended for after-tax 401k contribution ? Searched online but most answers are focussing on pre-tax contribution or whether their plan even allows mega backdoor conversion. I am not worried about those. Rather want to know only for the after-tax component of 401k. If plan allows, why would you not do a Roth conversion of your after-tax contribution? As far as I understand, after-tax con…

Is it worth it to contribute to your after-tax 401k? I accidentally maxed out my 401k before the end of the year so there are a couple weeks of company match that I’ll be missing out on. I was recommended to contribute to my after-tax 401k to still get the match. Is there anything in the future that I may need to worry about if I need to do any type of conversion? I’ll only be missing out on $160i…