AUTHOR: Randy Dobkin on 7/18/2024 FIRST: baldscreen on 7/18/2024 | RECENT: Mark Eckman on 7/20/2024
Comments
I believe the pro-rata rule applies only to IRAs. Roth conversions in high brackets are not advisable. My wife maxes out pre-tax contributions and then uses MBDR up to the plan's limit of 50% of salary. We take withdrawals from our taxable account if we need cash. So we basically fund her Roth 401(k) from our taxable account.
I've not seen any, but here's my take. Plan to leave enough in pre-tax to fill the lower brackets with withdrawals for the rest of life. Convert the rest to Roth (filling low brackets), having just enough in taxable to pay the tax on conversions.
Comments
I believe the pro-rata rule applies only to IRAs. Roth conversions in high brackets are not advisable. My wife maxes out pre-tax contributions and then uses MBDR up to the plan's limit of 50% of salary. We take withdrawals from our taxable account if we need cash. So we basically fund her Roth 401(k) from our taxable account.
Post: Mega Backdoor Roth
Link to comment from June 6, 2026
Yes, either 12 or 24% depending on income, which in turn depends in part on taxable and pre-tax balances.
Post: A Time to Save
Link to comment from June 4, 2026
I've not seen any, but here's my take. Plan to leave enough in pre-tax to fill the lower brackets with withdrawals for the rest of life. Convert the rest to Roth (filling low brackets), having just enough in taxable to pay the tax on conversions.
Post: A Time to Save
Link to comment from June 4, 2026
I can think of $1.8 billion wasted.
Post: Billionaires, taxes and you
Link to comment from May 30, 2026
Long term capital gains are taxed like qualified dividends.
Post: Billionaires, taxes and you
Link to comment from May 27, 2026
Here's a relevant podcast: https://www.nytimes.com/2026/04/17/opinion/ezra-klein-podcast-ray-madoff.html?smid=nytcore-android-share
Post: Billionaires, taxes and you
Link to comment from May 26, 2026
Sounds good except for distributions counting toward IRMAA MAGI. It should be truly tax free. Yeah, I know IRMAA is not a tax, but it works like one.
Post: Time to scrap IRAs, 401k, 403b and all the rest
Link to comment from May 21, 2026
I will gladly help pay down that debt by doing Roth conversions at 12%.
Post: Should Retirees Get a Temporary Flat Tax Window on IRA and 401(k) Withdrawals?
Link to comment from May 19, 2026
Those of us without all these great benefits just have to roll our own using the extra salary invested over a career.
Post: Benefits Young Adults Should Look at Before Taking a Job
Link to comment from May 13, 2026
Or select your favorite platform: https://taxfoundation.org/podcast/all/america-financial-literacy/
Post: Tax Foundation Podcast Episode on American Financial Literacy
Link to comment from May 7, 2026