Value of Backdoor Roth account ?

[jfoxcpacfp]

Lithium wrote:

jfoxcpacfp wrote:

$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:

[Lithium]

jfoxcpacfp wrote:

$5,500 * .0038 = $20.90

What am I missing?

Click to expand...

He has an entire balance of $150k, not $5500

[jfoxcpacfp]

$5,500 * .0038 = $20.90

What am I missing?

[AlexDDS]

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.

 

 

[jfoxcpacfp]

AlexDDS wrote:

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.

[AlexDDS]

jfoxcpacfp wrote:

AlexDDS wrote:

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.

[jfoxcpacfp]

AlexDDS wrote:

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.

[The White Coat Investor]

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.

[AlexDDS]

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.