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Old 08-18-2017, 06:09 AM
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Default 401k Rollovers

Hey guys. I have contributed pre tax and after tax contributions to my 401k. If you leave your employer are you able to rollover the after tax portions to a Roth IRA and the pre tax portions to a traditional IRA without triggering a taxable event?

If this is true, I'm surprised more people don't flood their 401k's with after tax contributions so they can rollover later and receive the tax free growth in the Roth IRA.

Source: https://www.irs.gov/retirement-plans...tirement-plans

Thanks!
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Old 08-18-2017, 09:14 AM
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Originally Posted by GoldenGoal View Post
Hey guys. I have contributed pre tax and after tax contributions to my 401k. If you leave your employer are you able to rollover the after tax portions to a Roth IRA and the pre tax portions to a traditional IRA without triggering a taxable event?

If this is true, I'm surprised more people don't flood their 401k's with after tax contributions so they can rollover later and receive the tax free growth in the Roth IRA.

Source: https://www.irs.gov/retirement-plans...tirement-plans

Thanks!
It does seem curious that I can only put $5,500/yr in a Roth IRA but I could put $18,000/yr in a Roth 401k. In the past I have rolled over a "mixed" 401k in the way you described just then, and assumed there was nothing taxable going on.
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Old 08-18-2017, 04:16 PM
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It does seem curious that I can only put $5,500/yr in a Roth IRA but I could put $18,000/yr in a Roth 401k. In the past I have rolled over a "mixed" 401k in the way you described just then, and assumed there was nothing taxable going on.
Some employers allow you to contribute after tax dollars which is separate from from the 18k pre tax or roth allowance in a 401k plan. So I've been contributing 18k pretax and as much possible after tax with the plan of converting the after tax to a Roth when I leave the employer.
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Old 08-18-2017, 04:20 PM
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Originally Posted by GoldenGoal View Post
Some employers allow you to contribute after tax dollars which is separate from from the 18k pre tax or roth allowance in a 401k plan. So I've been contributing 18k pretax and as much possible after tax with the plan of converting the after tax to a Roth when I leave the employer.
How is this possible? If you contribute 18k pre-tax isn't that the max allowable into a 401k per year???
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Old 08-18-2017, 04:40 PM
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How is this possible? If you contribute 18k pre-tax isn't that the max allowable into a 401k per year???
Currently IRS sets a limit of 53k on total contributions to a 401k plan in a single year - this includes your contributions (upto 18k of traditional 401k and/ or Roth 401k + employer's match + after - tax 401k).

After-tax contributions are not the same as Roth contributions for this purpose. Not all employer's give the option for making after-tax contributions.
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Old 08-18-2017, 05:18 PM
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Originally Posted by celalta;9072047[B
]Currently IRS sets a limit of 53k on total contributions to a 401k plan in a single year[/b] - this includes your contributions (upto 18k of traditional 401k and/ or Roth 401k + employer's match + after - tax 401k).

After-tax contributions are not the same as Roth contributions for this purpose. Not all employer's give the option for making after-tax contributions.
The limit applies to all Defined Contribution plans, not just 401k. And it was $53,000 in 2016, but was increased to $54,000 for 2017. See my post above.
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Old 08-18-2017, 06:10 PM
lulzEMH lulzEMH is offline
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Originally Posted by Klaymen View Post
It does seem curious that I can only put $5,500/yr in a Roth IRA but I could put $18,000/yr in a Roth 401k. In the past I have rolled over a "mixed" 401k in the way you described just then, and assumed there was nothing taxable going on.
Thanks! Some good threads in here. I accidentally contributed after tax dollars for a few years and thought I was going to get screwed on it. Now this is making me think I should just be dumping extra in as my company allows it. We have both Roth and standard 401ks as well offered. So I guess I can do my 18k to Roth and then dump in after tax into the standard 401k and roll it at a future time.

I'm a bit concerned the IRS guidelines change, either become vague where this is sketchy or banned. Any concern about that?

My picture is also muddied by a rather large LCF that actually can offset future gains in my taxable accounts but I guess after tax contributions also have the advantage of dividends and interest payments being tax free (can't be used to offset LCF).
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Old 08-18-2017, 09:18 AM
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Remember, just because an event is not taxable doesn't mean it's not reportable.
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Old 08-18-2017, 10:32 AM
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Remember, just because an event is not taxable doesn't mean it's not reportable.
What does this mean? Reportable where?
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Old 08-18-2017, 07:09 PM
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What does this mean? Reportable where?
Form 1099-R, I think
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