Thanks, appreciate the input. My 401k (which I just started funding in Jan, as it is a new job) is 100% in equities, so if it is the rule that the investments must be the same for traditional and Roth, that would be totally fine.@WestCoastPhan,
Please check with your plan, but I believe that most 401(k) plans that do offer Mega Backdoor Roth, DO NOT allow investments to be different between Traditional and Roth 401(k). If your Traditional 401(k) is invested in Target Date 2045 fund for example, your Roth 401(k) even through MBDR must be invested in Target Date 2045 fund.
I have gotten around this rule by virtue of keeping my previous 401(k) plan in tact (do NOT rollover); invest in my current 401(k) plan purely in S&P 500 Index Trust for both my Traditional (the initial $30,500) and the MBDR Roth (max allowed $15k per year at my job). International equities and fixed income are held in my previous 401(k). Rebalancing is through moving equities from the previous 401(k) plan's S&P 500 Index fund to international and fixed income.
I am severely allergic to having any bonds or international equities in a Roth account.
YMMV.
Statistics: Posted by WestCoastPhan — Sun May 19, 2024 10:47 pm — Replies 6 — Views 483