Hello All,
I am looking for some advice on what I thought was a straightforward situation. My company allows post-tax savings and backdoor Roth conversions. My situation (please let me know if anything is unclear or you need more information):
1. Save 20% of salary, Max my 401k contribution limit ($22500) sometime in Q3 each year
2. Remainder of the year the 20% deduction goes to a post tax (non-Roth) account in my company's retirement plan. Over the last several years, this has built to ~$100K in contributions (and around $18k in gains)
I would like to roll this post-tax money to a Roth account I have at Fidelity. My understanding is I can call the company plan administrator, request a check for the full amount in the post-tax account ($118k), deposit it into my Fidelity account, and on next years taxes I will pay normal capital gains on the $18K it generated over the past few years.
The call center rep for company plan said this was not the case, but could not provide any more information other than, "You'll owe taxes!" in a very strained voice. My reassurances that I am comfortable paying taxes on $18K for it to grow tax-free for the next 20 years fell on deaf ears. I got the impression they had not done a backdoor Roth conversion before. My Fidelity rep is unsure what additional restrictions there could be, and that my plan in the paragraph above is how it should work.
Is there anything I am overlooking?
Thank you for any advice you can offer.
I am looking for some advice on what I thought was a straightforward situation. My company allows post-tax savings and backdoor Roth conversions. My situation (please let me know if anything is unclear or you need more information):
1. Save 20% of salary, Max my 401k contribution limit ($22500) sometime in Q3 each year
2. Remainder of the year the 20% deduction goes to a post tax (non-Roth) account in my company's retirement plan. Over the last several years, this has built to ~$100K in contributions (and around $18k in gains)
I would like to roll this post-tax money to a Roth account I have at Fidelity. My understanding is I can call the company plan administrator, request a check for the full amount in the post-tax account ($118k), deposit it into my Fidelity account, and on next years taxes I will pay normal capital gains on the $18K it generated over the past few years.
The call center rep for company plan said this was not the case, but could not provide any more information other than, "You'll owe taxes!" in a very strained voice. My reassurances that I am comfortable paying taxes on $18K for it to grow tax-free for the next 20 years fell on deaf ears. I got the impression they had not done a backdoor Roth conversion before. My Fidelity rep is unsure what additional restrictions there could be, and that my plan in the paragraph above is how it should work.
Is there anything I am overlooking?
Thank you for any advice you can offer.
Statistics: Posted by Flynlow — Tue Jan 16, 2024 3:52 pm — Replies 1 — Views 127