Max Out 401k Before Back Door Roth IRA?

[Berry]

In 2019, one can contribute $19K to a Roth 401k (not considering the tax implications of doing so and assuming its available)? A high income professional (assuming above income limitations) may then contribute $6K more to a Roth IRA via the "Back Door"?

If so, if anyone is about to do a Back Door Roth IRA contribution then they should probably first max out their 401k account (if available)? Otherwise, they are introducing an unnecessary hassle associated with the back door. Is there any reason to contribute to a Roth IRA without first maxing out a 401k?

[spiritrider]

A high income individual should be using all pre-tax retirement contribution space and a backdoor Roth. Making a Roth 401k contribution reduces your after-tax income available to make the Roth IRA contribution.

However, if you are bound and determined to do so. IRS regulations prohibit the in-service withdrawal/rollover of 401k employee elective contributions. Roth contribution can be withdrawn at any time.

Just because you can do something does not mean you should do something.

[jhwkr542]

Berry wrote:

Is there any reason to contribute to a Roth IRA without first maxing out a 401k?

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In your unusual scenario where you're doing an either/or for a high income individual, you get more investment choices and probably lower costs with a Roth IRA, but the 401k might have a match you'd be missing out on.  However, if a high income professional can't max out both, then that individual probably has a spending problem, which trumps this minor detail.

[Peds]

It's not an either or, it's and.

[ENT Doc]

Berry wrote:

In 2019, one can contribute $19K to a Roth 401k (not considering the tax implications of doing so and assuming its available)?

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Yes.  But not wise in most high-income situations.

Berry wrote:

A high income professional (assuming above income limitations) may then contribute $6K more to a Roth IRA via the “Back Door”?

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Yes.

Berry wrote:

If so, if anyone is about to do a Back Door Roth IRA contribution then they should probably first max out their 401k account (if available)?

Click to expand...

Yes, in most cases.  But you should do both.

Berry wrote:

Is there any reason to contribute to a Roth IRA without first maxing out a 401k?

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Yes, because you're typically able to max out a Roth IRA earlier in the year than you are able to max out your 401k.  But again, both should be done.

[CordMcNally]

There's no reason for a high income professional not to max out all pre-tax accounts AND a backdoor Roth.

[Faithful Steward]

Berry wrote:

Is there any reason to contribute to a Roth IRA without first maxing out a 401k?

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If you know you're going to do both, then making the Backdoor Roth as early in the year as possible gives you more time for the account to grow tax-free. So, no, I don't think you need to wait.