For clarity, two different questions/processes...
If your 401k plan supports "after-tax contributions", and then either has an "in-plan conversion" and/or the ability to do a "rollover conversion" - that is a so-called Mega Backdoor Roth. https://www.bogleheads.org/wiki/Mega-backdoor_Roth
A "Mega" Backdoor Roth is not impacted by Traditional IRA balances. The only limit is if your plan supports one! If it does, the "Mega" portion gives you access to a much larger annual contribution. Assuming your plan allows the full amount, the total for 2024 (and < 50) for a 401k contribution is $69,000; with the "Mega" amount being what's left after "normal" (pre-tax or Roth) contributions and employer match. For example, my employer matches 50%, so my $23,000 contribution + $11,500 match leave $34,500 left for "after-tax" contributions.
The "normal" Backdoor Roth has nothing to do with your 401k, but is impacted by Traditional IRA balances. https://www.bogleheads.org/wiki/Backdoor_Roth
A "normal" Backdoor Roth is limited to the normal IRA contributions, for 2024 (and < 50) that's $7,000, and is done in a two-step process starting with a contribution to a Traditional IRA. If you have a Traditional IRA balance at the end of the year, the withdrawal is considered "pro-rated." (For example, if you had $7k pre-tax before contribution, $14k after contribution [$7k pre-tax], when you withdraw $7k, the IRS figures you are withdrawing 50% pre-tax and 50% after-tax [$7k/$14k].)
As to your question about "moving" the Traditional IRA - that doesn't matter... It doesn't matter "where" the IRA is - what matters is that you have one and the balance is > $0.
Instead, ideally your employer will let you do a rollover of your Traditional IRA into your 401k. If/when you can do that is up to your employer's plan...
And for clarity - if they are both available to you - you can do both - they do not conflict with each other in anyway.
If your 401k plan supports "after-tax contributions", and then either has an "in-plan conversion" and/or the ability to do a "rollover conversion" - that is a so-called Mega Backdoor Roth. https://www.bogleheads.org/wiki/Mega-backdoor_Roth
A "Mega" Backdoor Roth is not impacted by Traditional IRA balances. The only limit is if your plan supports one! If it does, the "Mega" portion gives you access to a much larger annual contribution. Assuming your plan allows the full amount, the total for 2024 (and < 50) for a 401k contribution is $69,000; with the "Mega" amount being what's left after "normal" (pre-tax or Roth) contributions and employer match. For example, my employer matches 50%, so my $23,000 contribution + $11,500 match leave $34,500 left for "after-tax" contributions.
The "normal" Backdoor Roth has nothing to do with your 401k, but is impacted by Traditional IRA balances. https://www.bogleheads.org/wiki/Backdoor_Roth
A "normal" Backdoor Roth is limited to the normal IRA contributions, for 2024 (and < 50) that's $7,000, and is done in a two-step process starting with a contribution to a Traditional IRA. If you have a Traditional IRA balance at the end of the year, the withdrawal is considered "pro-rated." (For example, if you had $7k pre-tax before contribution, $14k after contribution [$7k pre-tax], when you withdraw $7k, the IRS figures you are withdrawing 50% pre-tax and 50% after-tax [$7k/$14k].)
As to your question about "moving" the Traditional IRA - that doesn't matter... It doesn't matter "where" the IRA is - what matters is that you have one and the balance is > $0.
Instead, ideally your employer will let you do a rollover of your Traditional IRA into your 401k. If/when you can do that is up to your employer's plan...
And for clarity - if they are both available to you - you can do both - they do not conflict with each other in anyway.
Statistics: Posted by SnowBog — Wed Oct 09, 2024 11:35 pm