RMD Exemption?! …And 4 Other Reasons to Do A Reverse Rollover

[@hornbaker]

Good mention on the reverse rollover as a solution to the pro-rata rule - very few people know that trick, and a lot of people swear it isn’t possible, but it is. And if your 401k allows After-tax roll-ins, you can reverse rollover the after-tax IRA contributions to it and then convert to Roth 401k. My employer’s plan didn’t allow this, but I created a Solo 401k that does. Something you didn’t touch on, maybe because of timing vs legislation… Roth IRAs can’t currently be rolled into Roth 401k, but that’s changing for 2024. And a big plus for 401k… if you make an disallowed transaction, the law lets you simply fix it; in contrast, self-directed IRA is at-risk of being completely invalidated.

[@RRW359]

Do you need to contribute to your 401k to avoid RMD's or just have an account with your current employer?

[@johnkumpelis1121]

Great topic Eric! This is original content that nobody puts this info out quite like this...well done!

[@SafeguardWealthManagement]

Thank you John!

[@richardmilam1343]

Hey Eric, it’s it possible to open a separate IRA and contribute only none deductible contribution to that account only for the purposes of back door Roth conversions or do they look across all IRA plans for tax purposes in regards to the pro-rats rule?

[@takatsu5]

They look at all IRA accounts for purpose of pro-rata rule.

[@SafeguardWealthManagement]

takatsu5 is correct. They aggregate all IRA accounts together so unfortunately this would not sidestep the pro rata rule

[@jamesquast5543]

You talk about a lot of other topics not related to the subject.