millionaires

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Kenneth_2003
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2:28p, 1/15/26
AG
I can't do the Back Door Roth and for the simplicity it creates I'm basically glad for it.

In 2017 I was laid off. Once I got on with a new employer they, at the time, did not offer a 401(k). That meant my option was to leave my old one ~$200K with my previous employer or roll it into IRA's (ROTH and Traditional). I held no loyalty to my previous employer and there were some aspects regarding company organization and where things were headed, that severely cut against the prudence of leaving the 401(k) behind.

So today I'm above the income limits for traditional IRA Tax advantaged treatment and there is no way in hell I'm going to expose over a decade of gains to the Pro-Rata rule to make a ROTH contribution. That traditional IRA has just over $400K in it.

So I max out my 401(k) and put the rest of my long term savings into a taxable account.
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permabull
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In reply to LMCane • 2:44p, 1/15/26
AG
LMCane said:
Roth has a maximum annual income limit of $168,000

how are all of you multi-millionaires only making under $170k?

that is not even middle class in the DC area.


I have worked with deca millionaires who can easily manipulate their taxable income to qualify for all kinds of credits.. income =/= net worth
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GeorgiAg
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3:33p, 1/15/26
AG
Backdoor Roth. You have to start really, really slow and then work up to it.
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BDJ_AG
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In reply to TXTransplant • 4:11p, 1/15/26
AG
But you can also do both Backdoor Roth and Mega Backdoor ROTH if you have the access.
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EliteZags
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In reply to LMCane • 4:36p, 1/15/26
AG
LMCane said:
Roth has a maximum annual income limit of $168,000

how are all of you multi-millionaires only making under $170k?

that is not even middle class in the DC area.


Roth converting has nothing to do with income limits, and really neither does Roth eligibility either actually

but even then I was able to hit that milestone before 40 without my base ever going above that limit (still do backdoor tho), healthy mix of sound and yolo investing while living below means
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TXTransplant
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In reply to BDJ_AG • 6:00p, 1/15/26
BDJ_AG said:
But you can also do both Backdoor Roth and Mega Backdoor ROTH if you have the access.


Yep. No reason you couldn't do that.

However, even if I were still eligible for a backdoor Roth, I think I'd still max out my mega backdoor Roth first. Mainly because the backdoor Roth was a bit of a PITA because it took a few days to move the money around. And I think one year I forgot about it and didn't move the money to the investment account for a few months.

With the mega backdoor, I don't have to do a thing. The $7500 seems like pocket change when I can put $40k-ish in the mega backdoor.

But, I'm nowhere near the $72k employee+employer cap. If I made enough to hit that and was still eligible for a backdoor Roth, I'd max out both to get to $79500 in contributions.
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ABATTBQ11
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In reply to LMCane • 8:08p, 1/15/26
AG
LMCane said:
Roth has a maximum annual income limit of $168,000

how are all of you multi-millionaires only making under $170k?

that is not even middle class in the DC area.


We've hit $1 million before 40 and plan to be multimillionaires before 50. Our combined income has maxed around $160k, and that was before my wife quit working. It's definitely doable.

Also, married filing jointly is higher. Single income with non-working spouse could be eligible up to like $240k.
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BDJ_AG
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In reply to TXTransplant • 9:32p, 1/15/26
AG
I only made the comment that you can do both because so many people seem to be confused about ROTH in general, I didn't want them to think they had to choose one or the other. I should have been more clear in my post.

My employer limits our After-Tax to 10%, so I do both ROTH IRA and ROTH 401k.
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TXTransplant
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In reply to BDJ_AG • 5:23a, 1/16/26
You made a great point, and there is a ton of confusion around backdoor and mega backdoor Roths. I feel like we have this same conversation here every year.

I followed up with my comment because participating in the MBDR option has been so eye opening for me. As soon as I understood it and started doing it, I wondered WTF I even bothered with the $7500 contribution (actually $6k, the last time I put any money in it) to my personal Roth. I should have been putting that money (plus more) in my 401k all along. At least as long as I've been with this current employer, and have been fortunate enough to have the MBDR option.

Then when the discussion came up here about the new rule that catch up 401k contributions now have to go to a Roth, I made the connection that is basically what I'm already doing with the MBDR conversion. So, when the time comes for catch up contributions, I'll just put even more in the MBDR.

For the last couple of years my strategy has been to put my entire raise into the MBDR. This year is a big question mark because my industry has not done well, and my expectations for a bonus and raise are extremely low. That plus a kid finishing up college has money tight. Not where I expected to be at this stage of life/career, but hopefully it's temporary.
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YouBet
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In reply to TXTransplant • 7:33a, 1/16/26
AG
Quote:
You made a great point, and there is a ton of confusion around backdoor and mega backdoor Roths. I feel like we have this same conversation here every year.


Yes, we do and it's more like every few months. Thus, my earlier comment about having a Roth sticky topic at the top of this forum. It would save us a lot of repeated conversations.
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MAS444
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8:00a, 1/16/26
AG
I'm assuming most people on this thread generally understand backdoor Roth conversions. The person that started this whole derail is known for these kinds of repeated derails/trolls...
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YouBet
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In reply to MAS444 • 8:27a, 1/16/26
AG
MAS444 said:
I'm assuming most people on this thread generally understand backdoor Roth conversions. The person that started this whole derail is known for these kinds of repeated derails/trolls...


TBF, we still get new threads on this topic by new or infrequent posters quite often on this board outside of this thread.
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Ghost of Bisbee
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In reply to Kenneth_2003 • 10:14p, 1/16/26
AG
Kenneth_2003 said:
I can't do the Back Door Roth and for the simplicity it creates I'm basically glad for it.

In 2017 I was laid off. Once I got on with a new employer they, at the time, did not offer a 401(k). That meant my option was to leave my old one ~$200K with my previous employer or roll it into IRA's (ROTH and Traditional). I held no loyalty to my previous employer and there were some aspects regarding company organization and where things were headed, that severely cut against the prudence of leaving the 401(k) behind.

So today I'm above the income limits for traditional IRA Tax advantaged treatment and there is no way in hell I'm going to expose over a decade of gains to the Pro-Rata rule to make a ROTH contribution. That traditional IRA has just over $400K in it.

So I max out my 401(k) and put the rest of my long term savings into a taxable account.


I'm kind of like you. Moved my 401K from my first employer into a traditional IRA. I have several hundred K of pre-tax in there. I'm not about to pay taxes on all those gains just to make it Roth convertible. No thanks.

I also have a Roth IRA, but I haven't been able to contribute to it for years.
If I don't want to backdoor my trad IRA, I could start backdooring post tax thru my current 401K at work. I just don't want to keep track of what's pre and what's post. Probably much easier to do than what I'm imagining.

Like you, I max out my 401K then hit the taxable brokerage after that. Feel like I need to start doing some backdoor Roth via my current 401K
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TXTransplant
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In reply to Ghost of Bisbee • 5:49a, 1/17/26
If you mega backdoor through your 401k at work, you don't have to keep track of ANYTHING.

You just set up the MBDR, set your contributions to whatever you want them to be, and the account manager should take care of the rest.

My 401k is with Fidelity, and I can go in and look at my statements to see where I am with my conversion contributions.

The only other thing I have to do it report the 1099-R on my tax return. It doesn't change anything, but you do need to report it.

That's why I said in my previous post that, now that I know, I would max out a MBDR before bothering with my own individual backdoor Roth because the MBDR is easier (and you can contribute way more than $7500).

The "traditional" backdoor Roth wasn't really hard, it was just one more thing I had to remember to do.

The only downside is my MBDR contributions go to the same funds as my other 401k contributions. But that is doing well, so I have no complaints or issues. And I'm not one to be playing the market with my 401k anyway. That's what my individual investment account is for.
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YouBet
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In reply to Ghost of Bisbee • 8:32a, 1/17/26
AG
I moved my first career 401k away from employer over to Fidelity. I was not able to do Roth 401k for much of my time there so I have a larger number in my traditional IRA and smaller number in Roth IRA post split from moving it away from employer. There is no way I'll be Roth converting all of that first number unless our tax rate remains so low for many years that it could make sense. So, we will likely just Roth convert up to limits while we have an uber low tax rate and then move on. At this point, it's all about overall portfolio allocation/risk and efficient tax management anyway, so I don't mind having a good mix there.
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CheeseSndwch
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12:56p, 2/11/26
How do you do, fellow millionaires?
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Ducks4brkfast
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1:02p, 2/11/26
AG
Smells like new money in here.
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jsc8116
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In reply to LMCane • 1:27p, 2/11/26
AG
Living below your means, dual incomes, save like crazy...it is possible. Me and my wife never made over Roth income limits, saved heavily, didnt splurge on new purchases, cars, etc.
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RightWingConspirator
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In reply to BDJ_AG • 3:26p, 2/11/26
AG
BDJ_AG said:
But you can also do both Backdoor Roth and Mega Backdoor ROTH if you have the access.

I do both these. Mega Roth I roll all my after-tax 401k contributions into the Roth and make my Roth contributions to an IRA and move to a Roth the next day. Am I missing something? Some say it's difficult or they can't do it. Not following. I've had no issues.

We have saved over $4MM and I make $350k/year. We are able to do all the above without any issues.
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Leeman
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3:38p, 2/11/26
Lots of back door access going here....
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AgsMyDude
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In reply to Leeman • 4:04p, 2/11/26
AG
Leeman said:
Lots of back door access going here....


That's what happens when you become a millionaire
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txaggie_08
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In reply to RightWingConspirator • 6:28p, 2/11/26
AG
As far as Mega Backdoor Roth goes, not everyone's plan allows it - mine doesn't.

As for Backdoor Roth, the only hurdle that you may have out there is if you also have a traditional, pre-tax, IRA. Then if you did the backdoor Roth you'd be subject to the pro-rata rule.
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Marauder Blue 6
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In reply to txaggie_08 • 6:30p, 2/11/26
AG
txaggie_08 said:
As far as Mega Backdoor Roth goes, not everyone's plan allows it - mine doesn't.

As for Backdoor Roth, the only hurdle that you may have out there is if you also have a traditional, pre-tax, Roth. Then if you did the backdoor Roth you'd be subject to the pro-rata rule.

What is a pre-tax Roth?
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txaggie_08
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In reply to Marauder Blue 6 • 6:37p, 2/11/26
AG
Meant IRA. Fixed it.
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RightWingConspirator
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In reply to txaggie_08 • 7:16p, 2/11/26
AG
You're right and my employer's plan does not allow for it, so what I do is I take a distribution of all the post tax contributions to the 401k, pay my capital gains tax which is usually only on a gain of a couple thousand and roll that over to my financial advisor's firm and then do the mega back door Roth. It's not as easy as it would be if my employee plan allowed for it but it is still possible.
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txaggie_08
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In reply to RightWingConspirator • 7:26p, 2/11/26
AG
What you're describing is a Mega Backdoor Roth, isn't it? Once you max out your elective contribution limit ($24,500 Roth or Traditional for 2016) then you can contribute post-tax dollars up to the annual limit (minus employer match). Those post tax dollars are then rolled into a Roth IRA. If I understand it all correctly you are doing exactly a Mega Backdoor Roth which your employer allows. My employer doesn't allow us to go over the $24,500 - we're capped, and not allowed any in-service withdrawals.
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Ducks4brkfast
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In reply to txaggie_08 • 7:46p, 2/11/26
AG
Just the earnings. Not the post tax contribution.
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RightWingConspirator
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In reply to txaggie_08 • 8:12p, 2/11/26
AG
Let me rephrase, my employer's plan does not allow for me to rollover into a Roth directly from my 401k within the Fidelity framework. I can roll it over to another money manager outside the Fidelity family and to the mega Roth. Apologies if I misunderstood your point. Ideally I'd just roll it directly from my 401k (Fidelity) to a Fidelity Roth. I can't do this; hence, I have to pay the cap gain tax and roll it over to another firm's Roth. To be clear, I'm usually cut a ~$20,000 plus check (principle plus gain) which I roll over to another firm's Roth. I just have to pay the capital gains tax which is usually only a gain no larger than $2k or so.

I hit my yearly max every year. This year given that I'm over 50 I can contribute $80k to the 401k inclusive of employer match.
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EliteZags
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In reply to AgsMyDude • 10:52p, 2/11/26
AG
AgsMyDude said:
Leeman said:
Lots of back door access going here....


That's what happens when you become a millionaire


and helps some get there..
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MavsAg
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In reply to AgsMyDude • 9:02a, 2/12/26
AG
AgsMyDude said:
Leeman said:
Lots of back door access going here....


That's what happens when you become a millionaire

That, unfortunately, was not the response my wife gave me when I told her we became millionaires last year.
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YouBet
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In reply to MavsAg • 9:56a, 2/12/26
AG
MavsAg said:
AgsMyDude said:
Leeman said:
Lots of back door access going here....


That's what happens when you become a millionaire

That, unfortunately, was not the response my wife gave me when I told her we became millionaires last year.


That's why you get a girlfriend on the side once you become a millionaire.
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RightWingConspirator
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In reply to YouBet • 11:15a, 2/12/26
AG
^
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Best way to go from millionaire to non-millionaire quickly.
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YouBet
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In reply to RightWingConspirator • 11:25a, 2/12/26
AG
RightWingConspirator said:
^
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Best way to go from millionaire to non-millionaire quickly.


I was recommending it for y'all. I'm not that stupid.
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tejas_ayanem
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12:13p, 2/12/26
Are you a millionaire if you have a net worth of 1 million as a couple, or do you need 2 million?
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Marauder Blue 6
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In reply to tejas_ayanem • 12:45p, 2/12/26
AG
tejas_ayanem said:
Are you a millionaire if you have a net worth of 1 million as a couple, or do you need 2 million?

Do you also have a girlfriend, or not?
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