One reason is that contribution limits are the same conventional or roth 401k.

Posted by gvibes on November 23, 2025, 10:37:04, in reply to "I don’t really understand why anyone would do a Roth rather than a pre-tax account "

So putting in the max dollars in the roth effectively gives you more tax advantaged investment funds. Only applies if you are maxing though. Previous Message Tons of people seem to love Roth, though, so I must be missing something. But a pre-tax contribution reduces your taxable income from the highest tax bracket for your working age income. While a Roth allows to reduce taxable income when you are retired. So the only way a Roth is beneficial (assuming static tax brackets) is if your income in retirement is higher than your income when you are working. But if you are approaching that situation, why on earth wouldn’t you decide to retire earlier, rather than continue working so that you can have more income when you are too old to enjoy it? Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

Roths don't have required yearly withdrawals by owner

Posted by Potomac on November 23, 2025, 10:09:00, in reply to "I don’t really understand why anyone would do a Roth rather than a pre-tax account "

I’m already maxing pre-tax. Just trying to figure out what to do with any extra*

Posted by shua on November 23, 2025, 9:45:07, in reply to "I don’t really understand why anyone would do a Roth rather than a pre-tax account "

Previous Message Tons of people seem to love Roth, though, so I must be missing something. But a pre-tax contribution reduces your taxable income from the highest tax bracket for your working age income. While a Roth allows to reduce taxable income when you are retired. So the only way a Roth is beneficial (assuming static tax brackets) is if your income in retirement is higher than your income when you are working. But if you are approaching that situation, why on earth wouldn’t you decide to retire earlier, rather than continue working so that you can have more income when you are too old to enjoy it? Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

A bit presumptuous to assume tax brackets remain static (depending on your horizon)

Posted by Dilbert on November 23, 2025, 8:52:33, in reply to "I don’t really understand why anyone would do a Roth rather than a pre-tax account "

Also, most financial advisors would still suggest you max out pre tax options first. And if your AGI prevents the actual tax deduction for a traditional IRA, then it is helpful. Previous Message Tons of people seem to love Roth, though, so I must be missing something. But a pre-tax contribution reduces your taxable income from the highest tax bracket for your working age income. While a Roth allows to reduce taxable income when you are retired. So the only way a Roth is beneficial (assuming static tax brackets) is if your income in retirement is higher than your income when you are working. But if you are approaching that situation, why on earth wouldn’t you decide to retire earlier, rather than continue working so that you can have more income when you are too old to enjoy it? Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

There's no galaxy in which Lindsey Graham is a top.*

Posted by complainant on November 21, 2025, 19:00:22, in reply to "Rumor has it that Lindsay Graham is more interested in the MAGA Back Door*"

Previous Message Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

Doesn’t that apply to a Traditional IRA that has pre-tax rollover funds?…

Posted by shua on November 21, 2025, 18:20:23, in reply to "Most people that can Mega Back Door would get hit by the Pro Rata rule, which makes getting one bad*"

Please cite your source

Posted by Dilbert on November 21, 2025, 17:31:31, in reply to "Most people that can Mega Back Door would get hit by the Pro Rata rule, which makes getting one bad*"

Mega Back Door <> Back Door Previous Message Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

Go on*

Posted by Carl Spackler on November 21, 2025, 17:30:19, in reply to "Most people that can Mega Back Door would get hit by the Pro Rata rule, which makes getting one bad*"

Previous Message Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

What does it represent? I’m just annoyed that I haven’t been able to…

Posted by shua on November 21, 2025, 17:44:29, in reply to "I hate everything the mega backdoor Roth represents. Such an unnecessary,"

100% agree, but while it exists, I will take advantage of it.*

Posted by illinibone on November 21, 2025, 17:32:43, in reply to "I hate everything the mega backdoor Roth represents. Such an unnecessary,"

Previous Message Convoluted, bloated mass of bullshit. Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed. Script Kiddie

Agree that they should not exist*

Posted by Potomac on November 21, 2025, 16:50:57, in reply to "I hate everything the mega backdoor Roth represents. Such an unnecessary,"

Previous Message Convoluted, bloated mass of bullshit. Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

I would rarely recommend Mega Back Door -- but also overfunding 529 is not that great

Posted by Quiz on November 21, 2025, 17:20:38, in reply to "Is there any reason to switch to a Mega Back Door Roth vs putting money into 529?"

If you aren't overfunding, 529 is great (and the kids can pull some overfunding out as Roth IRA contributions. Anything past that though is taxed 10% plus income tax on all earnings - which is pretty harsh compared to long term cap gains taxation. Previous Message Assume I am nowhere near what my kids will require for college. Similar federal tax advantages + Illinois deduction for contributions means I should stick with 529, yes? Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

Thanks, that’s what it sounded like*

Posted by shua on November 21, 2025, 16:56:18, in reply to "mega back door roth is better than ira->roth conversions"

Previous Message If you do a back door roth (ira -> roth conversion) you have to make sure you do all of your ira funds, or you're subject to pro rata rules. With the mega back door 401k, as long as you do an immediate in plan conversion (fidelity allows this, you need to make sure your plan does), you can then roll those out to a roth ira without having to worry about pro rata. There's a little more to it, but not much. Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

acknowledged*

Posted by Tortillini on November 21, 2025, 15:04:07, in reply to "skiddley biddley bop*"

Previous Message Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

Are you a financial planner?*

Posted by Carl Spackler on November 21, 2025, 14:34:04, in reply to "To me, non-Roth impact to heirs has somewhat lowered their relative value"

Previous Message I consider it possible to have "too much" in your non-Roth account(s) relative to taxable assets. Until recently, a non-spouse could inherit retirement assets and withdraw over the beneficiary's projected life. Fantastic. Now the person must withdraw all the money within ten years, which is a major difference. All taxable in non-Roth. Possibly at a terrible time for beneficiaries at peak income. By contrast, taxable assets may get a stepped up basis and don't have to be withdrawn at all. So, I have suggested to some people who are within a reasonable distance of retirement that they reconsider how much they put into a retirement account vs other options. The new-ish Qualified Charitable Distribution is also very attractive as a potential way to donate money directly from an IRA (not 401k) without tapping taxable assets.

But the mega back door roth is already after tax contributions.

Posted by Dilbert on November 21, 2025, 14:53:47, in reply to "i'll use the roth for catch up contributions, but will not convert any of my traditonal as i want"

It isn't converting traditional IRA funds. The government already got their tax money on these funds. Previous Message to avoid paying taxes for as long as possible for a variety of reasons. Previous Message My company recently switched our 401k to Fidelity (from some weird company with limited options). I'm already maxing my 401k. And now with the 2026 changes to 50+ catch-up, I will have my catch-up amount placed in a Roth 401k. It also looks like I also have the option to make post tax contributions as part of my 401k, and this appears to be the Mega Back Door Roth? It sounds like I can just call Fidelity and the post-tax contributions will become "In-Plan Roth Conversion" that would join my catch-up amount in the 401k Roth So if I understand correctly, I can contribute to the Mega Back Door Roth up to ($70k - 401k contributions and company matches). Is there any reason to mess around with Traditional IRA -> Back Door Roth conversion, if you can take advantage of the Mega Back Door Roth? unless of course I was maxing out the Mega Back Door Roth (doubt that happens)? I can't tell if this is super confusing or I'm actually starting to understand what I typed.

anybody who is nearing 65 and Medicare must consider that carefully

Posted by Potomac on November 21, 2025, 14:04:16, in reply to "i'll use the roth for catch up contributions, but will not convert any of my traditonal as i want"