Related Posts
Thoughts on Credera as a firm?
What’s your favorite brand social account rn?
Additional Posts in Big Law
Any intel on Akerman billable requirement?
Anyone else hoping for that H1B this year?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
Yes. Very glad we have this (but Congress might do away with it this year).
End result = an additional 35k of post-tax dollars into my 401k. Once I maxed pre-tax contributions I began making after-tax contributions each pay period. My impression is that a relatively small number of lawyers at my firm take advantage of this.
Thanks for sharing. I’ve been wanting to do this, just haven’t taken the time to figure out how it’s done (both setting it up through my firm’s plan, plus additional tax forms, if any). My firm also pays bonuses in February, so hopefully I can figure it out before then.
No, and I’m still mad about it
Latham does (via Schwab), and I use it
Mine doesn't either. Frustrating.
Mentor
What does mega back door Roth contribution mean?
I think it has to be a specific type of employer based 401k for it to work
How would this be worded in a benefits package if they did? I’d love to use it and I’m not familiar with how it works.
You can ask your benefits people 1) if after-tax contributions are allowed under the 401k plan and 2) if you can do in- service withdrawals or in-plan rollovers.
My firm doesn't, but my SO works at Covington and they offer a mega backdoor Roth. I'm genuinely jealous. We both max out all of our tax advantaged accounts every year and have done so since first year (other than the stub year, when my SO didn't max the mega backdoor Roth).
MoFo does 👍🏽
Enthusiast
A little off topic but does anybody know what the advantage of this is?
It's contribution with after tax dollars so it doesn't reduce your tax liability. It is a tax deferred account so you get tax free inside build up which is nice.
Personally, I put anything over my yearly 401k contribution into real estate investments. They generate some free cash flow and the deductions really reduce my tax liability. (As opposed to the backdoor which doesn't further reduce my tax liability; on top of the fact that it's not diversified since my 401k is already entirely exposed to stocks / bonds.). Can anyone gut check me? Should I be using the backdoor?
A mega backdoor Roth is functionally equivalent to an additional Roth 401k contribution, which grows tax free. Taxes are owed at the time of converting after tax funds into Roth funds, but if your account automatically converts after tax funds into Roth funds on the same day of contribution, the taxes on that one day “gain” should be little to none.
Note that using the mega backdoor Roth does not preclude you from also making pre tax or Roth contributions up to the official IRS limit ($20,500 for 2022). It’s understood that anyone considering a mega backdoor Roth is also maxing out normal 401k contributions.
Does anyone know if Skadden does? I think I remember seeing they do.
Does anyone know if Mayer Brown has it?
Enthusiast
@OP - are the investment options whatever you have available in your 401k plan? Like a backdoor IRA might make sense if it's to an SD-IRA?
I’m not sure but you manage your own account with Citibank. Can you expand on your last sentence a bit more?