Comments on: Strategy to Contribute More Than Roth IRA Limit Allows

By: Madison

Madison — Fri, 26 Sep 2008 17:50:22 +0000

@ Ben: Check your Summary Plan Document. There should be a section on withdrawals. If your plan allows withdrawals (regular ones, not hardship) you should be able to complete a rollover to an IRA.

By: Ben

Ben — Fri, 26 Sep 2008 16:45:50 +0000

My employer offers terrible 401k options. Do you know if it is possible for me to rollover my 401k into an IRA while still working here? All of my contributions have been pretax.

Thanks!

By: Madison

Madison — Tue, 04 Dec 2007 19:50:26 +0000

@ Karl This is something I hadn’t thought of. It should help to eliminate a lot of the paperwork trying to account for basis when moving through the IRA. To avoid that step and the prorating would be excellent! Good thinking.

The contributions would almost be like a Roth 401k. You would still need to pay tax on the earnings between the contribution and the rollover. The quicker the rollover the better.

By: Karl

Karl — Tue, 04 Dec 2007 18:25:28 +0000

Seems as though I read that, as a result of the Pension Reform Act, that (starting in 2008?) people will be able to rollover a 401(k) directly to a Roth IRA. If that is so, won’t a person be able to rollover their after-tax 401(k) contributions directly to a Roth IRA (with no addional taxes — and without a need to pro-rate after- vs. pre-tax IRA dollars), and rollover the pre-tax portion to a traditional IRA (assuming that they terminate his/her employment)?

If so, that looks as though after-tax 401(k) contributions would be, virtually, Roth 401(k) contributions, for people whose employers don’t offer Roth 401(k)s. Thoughts?

By: Madison

Madison — Wed, 28 Nov 2007 03:50:02 +0000

Living Off Dividends- The traditional way to rollover money is from a 401k-IRA-Roth IRA after you leave a job.

In this strategy, you complete the same rollover, but you add two twists: 1) you complete the rollover while still working and 2) you use after-tax dollars to fund the 401k plan, eliminating the need to pay tax on the rollover.

By: This Week in Personal Finance – November 25th, 2007 » American Consumer News

Sun, 25 Nov 2007 21:22:06 +0000

[...] Strategies to Contribute More Than Your Roth IRA Allows @ My Dollar Plan [...]

By: Living Off Dividends

Living Off Dividends — Fri, 23 Nov 2007 01:57:40 +0000

thats an interesting concept, but i’m not sure I followed how it worked.

thanks for making me aware of it.

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Buy A New Car vs Take The Subway, Thanksgiving Feasts @ The Carnival — Wed, 21 Nov 2007 15:52:47 +0000

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By: Carnival of Personal Finance » Carnival of Personal Finance #127

Carnival of Personal Finance » Carnival of Personal Finance #127 — Mon, 19 Nov 2007 21:42:44 +0000

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By: Carnival of Personal Finance #127 - Wonders of the World | Moolanomy

Carnival of Personal Finance #127 - Wonders of the World | Moolanomy — Mon, 19 Nov 2007 14:02:43 +0000

[...] Dollar Plan presents Strategy to Contribute More Than Roth IRA Limit Allows — A well explained strategy on how to use 401k after-tax contribution as a mean to contribute [...]