By Ian Berger, JD
IRA Analyst

Sarah Brenner


For a number of years, the “mega backdoor Roth” strategy has been touted as a way for employees to convert large amounts of after-tax employee contributions to Roth IRAs. Unfortunately, in most cases, the strategy won’t work. Here’s why.

First, a little background. The mega backdoor Roth is simply the company retirement plan version of the backdoor Roth IRA. The backdoor Roth IRA is designed for individuals whose income exceeds the IRS limit for making Roth IRA contributions directly. The backdoor strategy allows for higher-income employees to make Roth contributions indirectly by making a traditional IRA contribution and subsequently converting it to a Roth IRA. Congress and the IRS have both specifically blessed the backdoor Roth strategy.

By contrast, the mega backdoor allows 401(k) [or 403(b)] after-tax monies to be distributed while the employees is still working and immediately converted to a Roth IRA on a virtually tax-free basis. Why is this advantageous? Well, after-tax contributions and Roth contributions are both made with after-tax salary. But the earnings on after-tax contributions are taxable, while Roth IRA distributions are tax-free if made in a qualified distribution.













Q: Does the SECURE Act affect inheritors of a Roth IRA account? If so, in what way, and why - since it is not a pre-tax account?


Q: I have been taking my RMDs on a monthly basis in 2020. Since the Cares Act has suspended RMDs for 2020, I would like to rollover my past 2 distributions. I would like to aggregate those two distributions and roll them over. I have not performed any rollovers within the last 12 months.

This is where it gets hairy. Some people are telling me I cannot aggregate the past two months' distributions and roll them over as ONE rollover. However, those people who have taken their entire RMD as one lump sum vs. monthly are allowed to rollover the entire amount, which doesn't seem fair. Thoughts?


Q: I am over 65 and retired. Can I borrow up to the $100,000 from my Roth IRA and redeposit it within the next 3 years? I know it wouldn't be taxed because I've had it for more than 5 years and I'm of retirement age. I just need the money now, and I would be able to replace it if it's allowed.


Q: Hi, I am retired and get Social Security. Can I still contribute to a regular IRA or Roth IRA?



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