401k plan allows after-tax contribution w/ auto in-plan Roth conv. capped at 7% of income on top of pre-tax and employer match. Does it impact $7k max on after-tax IRA?

[asi81]

Beginning 2024 employer sponsored plan offers after-tax contribution with auto in-plan roth conversion of the after tax dollars, it is capped ad 7% of my annual income but it says it is on the top of the $23k maximum and employers match. In the past I have been maxing out after tax traditional IRA and doing backdoor conversion. I am trying to find out if I opt in for the 7% after-tax 401k and do the roth conversion, would that have any impact on my eligibility to contribute $7k to traditional IRA and do backdoor conversion. Please provide supporting documentation, I have bee searching IRS website unsuccessfully. Thanks!

[AmyC · Accepted solution]

No, the 401k at work is one plan - even with the ROTH. While the individual ROTH is a separate plan. The only change would be your income and the limitations imposed by each type of plan. IRS pub 590 shows employer pensions interacting with IRA's and the limitations. A taxpayer can have multiple plans but can't surpass the limitations for each type of plan. 

If you scroll down in retirement topics, you will see overall contribution limits to help with your 401k alone.