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Is this Backdoor + Mega plan correct?

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  • Is this Backdoor + Mega plan correct?

    Current Situation:

    Spouse: traditional IRA: $2,000 pre-tax

    Me: traditional IRA: $0

    Spouse: Employer 403b

    Me: Employer 401k allowing non-Roth after-tax with in-service non-hardship withdrawals.


    Goal: Perform backdoor Roth IRA AND Mega-backdoor this year.


    So my plan is:

    1) trustee-to-trustee transfer spouse tIRA money to her employer 403b (bring balance to $0).

    2) then we will contribute $5500 per person to our traditional IRA accounts, and then instruct the plan administrator to convert these to Roth IRA a few days later.

    3) i will then instruct 401k admin to trustee-to-trustee transfer non-roth after-tax contribution to Roth IRAs and the earning to my empty traditional IRA.

    4) Before December 31, 2017, will trustee-to-trustee tranfer tIRA amount (originally earnings from NRAT contributinos) back into the employer 401k pre-tax account.


    Does this successfully address both Pro-rata and One-per-year IRS rules?



  • #2
    WCICON24 EarlyBird
    That sounds like a plan. Suggestions I would make:

    1. Go ahead and convert the $2k pre-tax TIRA into a Roth and pay the taxes.

    2. Same for any annual earnings on the NRAT. Move it all to a Roth and start the tax-free growth. Done annually, the tax should be relatively minimal. Of course, this assumes there is growth in the account.

    My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 for CPA clients (we are Flat Fee for both CPA & Fee-Only Financial Planning)
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