Has anyone here contributed after tax money to Voya and then done an In service rollover into an external Roth IRA? I see the form on Voya for in service rollovers and Roth is an option? Ie executed a mega back door Roth?
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@Kesv+1tnwKvDf the whole point of roth is to avoid tax on capital gain. You still pay tax on capital gain in traditional IRA so that's pointless even if you could do it.
Pretty sure you can roll your earnings into a traditional IRA if you don't want to pay the taxes on the earnings.
Pretty sure you can roll your after tax earnings into an outside traditional IRA if you don't want the tax bill. Check that out.
Yes i am doing it. At maximum allowable contribution (15% of my salary + 5% of bonus), i can contribute more than the yealy limit on pretax 401k, so I dump the rest into after tax. Then at the end of the year, I fax the conversion form to voya to convert them to roth. Because i already pay tax for the after tax contribution, when converting, the only extra tax I have to pay is on the gain.
You can take your after tax contributions to the 401K do a mega back door Roth into a Roth 401K. Easy. One simple form.
Thanks! I may roll some out of Voya for more investment options. I think you have to be 50 for that option??
The back door is a way around iira contribution limits. I’d put my 23 in 401k, 7k catch up in Roth and then over fund with after tax cash. I think I can then take that after tax money and roll into a Roth through the back door. Since it’s already after tax money. Seeing lots on you tube about this strategy.
You’re right. I do need a financial / tax strategy person.
I wish they taught you this stuff somewhere / some how. It’s complicated.
I’ve got a ways to go before retirement. Just trying to be smart and avoid future rmd requirements as well.
To clarify what I am talking about below is a traditional ira funded with pretax money. From what I understand it looks like the taxes you pay will be on the money you made over the principal investment. I would still talk with a financial advisor. One thing I did find out as well is that if you are over a certain age you can rollover your 401k to a broker outside of Voya while you are still working for Oxy. I called Voya and they confirmed that as well. You would still contribute to Voya to get the match as long as you work for Oxy, but you can move a large amount to an outside broker.
Talk to a financial advisor. I just went through this and the conversion to a ROTH will hit you hard on the upfront taxes, but there are other benefits like no RMD's which at 73 will start. The person I talked with did a projection of converting to a ROTH over a 5 year period to complete the conversion. There are a lot of things to take into account if you are retiring like the penalties from Medicare under IRMAA. Based on your yearly adjusted gross income medicare can double, and that includes plans B and D. I actually have been shopping around for the best financial advisor, so talk to a few before doing anything with Voya would be my advice. Example basic Medicare Plan B will be 185.00 a month in 2025, and based on your adjusted gross income it can increase in stages. Go look at the IRMAA tables as well. If you are not on Medicare yet it probably does not matter, but at least you will know these expenses for the future. Best advice is talk to a financial planner. I thought I had it under control until I worked with a few and they take into account things I never thought of like taxes, inheritance, etc.