Hello,
I am currently a resident with 2 more years to go. However, my wife just graduated from residency this year and has started a new job as an employed physician by the hospital. She has been offered a 401k with several options for contribution. She can choose to make Pre-Tax contributions, Roth contributions, and After-Tax contributions.
We understand that there is an 18k contribution limit combining 401ks throughout the year of 2017. Her prior retirement account during residency was a 401a for which she had a mandatory contribution at 7.5%. She also did a short period of moonlighting and made minor contributions to another 401k.
We also learned there is now a maximum of 54k contribution for 2017 which includes all employee and employer contributions. Looking at her 401k package details, she is allowed to make 1 in-service withdrawal every quarter, which may make her eligible to make a Mega Backdoor Roth IRA conversion.
Here are some more details about this: http://www.madfientist.com/after-tax-contributions/
Question 1: How much can she contribute to her 401k at her new job and do the prior 401a contributions count towards the limit?
Question 2: If she want to maximize the retirement benefits, should she maximize Pre-Tax contributions or Roth contributions? Or do some of each? (The thought here being that we are in a lower tax bracket this year compared to where we will be next year)
Question 3: Does she actually qualify for the Mega Backdoor Roth IRA conversion?
We would love to hear any thoughts you may have. Thanks!
I am currently a resident with 2 more years to go. However, my wife just graduated from residency this year and has started a new job as an employed physician by the hospital. She has been offered a 401k with several options for contribution. She can choose to make Pre-Tax contributions, Roth contributions, and After-Tax contributions.
We understand that there is an 18k contribution limit combining 401ks throughout the year of 2017. Her prior retirement account during residency was a 401a for which she had a mandatory contribution at 7.5%. She also did a short period of moonlighting and made minor contributions to another 401k.
We also learned there is now a maximum of 54k contribution for 2017 which includes all employee and employer contributions. Looking at her 401k package details, she is allowed to make 1 in-service withdrawal every quarter, which may make her eligible to make a Mega Backdoor Roth IRA conversion.
Here are some more details about this: http://www.madfientist.com/after-tax-contributions/
Question 1: How much can she contribute to her 401k at her new job and do the prior 401a contributions count towards the limit?
Question 2: If she want to maximize the retirement benefits, should she maximize Pre-Tax contributions or Roth contributions? Or do some of each? (The thought here being that we are in a lower tax bracket this year compared to where we will be next year)
Question 3: Does she actually qualify for the Mega Backdoor Roth IRA conversion?
We would love to hear any thoughts you may have. Thanks!
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