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Value of Backdoor Roth account ?

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  • Value of Backdoor Roth account ?

    If one has 150k in IRA account ,does it make a sense to roll it into 401k with AUM fee 0.38% to be able to have $5500 Backdoor Roth vs just investing into taxable account ? tax rate -43%.

    401k with AUM 0.38% - tax deductible fee $570 ?

    or 401k with AUM fee 0.08% -tax deductible fee $120 ?

    Thank you.

  • #2
    I think so, but it sounds like you understand the issue. Be aware you may get more asset protection in your state for a 401k over an IRA too.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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    • #3




      If one has 150k in IRA account ,does it make a sense to roll it into 401k with AUM fee 0.38% to be able to have $5500 Backdoor Roth vs just investing into taxable account ? tax rate -43%.

      401k with AUM 0.38% – tax deductible fee $570 ?

      or 401k with AUM fee 0.08% -tax deductible fee $120 ?

      Thank you.
      Click to expand...


      According to your description, you are a small business owner. Isn't there an opportunity to roll it into your own SOLO-k? Or couldn't you create one? If that is not possible now or you foresee no opportunity to do so, then roll into the "better" plan. My concern with doing so is that you lose a measure of control when you roll over to an employer's 401k.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4







        If one has 150k in IRA account ,does it make a sense to roll it into 401k with AUM fee 0.38% to be able to have $5500 Backdoor Roth vs just investing into taxable account ? tax rate -43%.

        401k with AUM 0.38% – tax deductible fee $570 ?

        or 401k with AUM fee 0.08% -tax deductible fee $120 ?

        Thank you.
        Click to expand…


        According to your description, you are a small business owner. Isn’t there an opportunity to roll it into your own SOLO-k? Or couldn’t you create one? If that is not possible now or you foresee no opportunity to do so, then roll into the “better” plan. My concern with doing so is that you lose a measure of control when you roll over to an employer’s 401k.
        Click to expand...


        I have 10 employees , so I cant have Solo-k , and because I dont think its a fair game to have a pooled 401k plan  I offer participant -directed 401k and with participant-directed we have to pay some recordkeeping fee.

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        • #5


          I have 10 employees , so I cant have Solo-k , and because I dont think its a fair game to have a pooled 401k plan  I offer participant -directed 401k and with participant-directed we have to pay some recordkeeping fee.
          Click to expand...


          I see. So you actually control the choices in your 401k, anyway, which is the same. Concur to roll into your current plan.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #6
            If 0.38% AUM fee ,it looks  like like I have to pay $342 after tax for each year for $5,500 Backdoor Roth :1st year-6.2% 2nd-3.1$ 3rd -2.1%,4th-1.6% 5th-1.2%, to have 27,500 backdoor Roth in 5 years with total fee $1,710 (6.2%) ???

            or to keep it in IRA for possible roth conversion/recharacterization(you cant recharacterize roth 401k) and invest $5,500 into taxable account ?

            Thanks.

             

             

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            • #7
              $5,500 * .0038 = $20.90

              What am I missing?
              Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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              • #8




                $5,500 * .0038 = $20.90

                What am I missing?
                Click to expand...


                He has an entire balance of $150k, not $5500
                I sometimes have trouble reading private messages on the forum. I can also be contacted at [email protected]

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                • #9







                  $5,500 * .0038 = $20.90

                  What am I missing?
                  Click to expand…


                  He has an entire balance of $150k, not $5500
                  Click to expand...


                  Ahhh, thanks, Lithium - should have gone back to the beginning of the thread. ops:
                  Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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