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I'm maxing out my employer's (government) 401k and 457 plans. May I additionally contribute to a separate "backdoor" Roth IRA, without incurring penalties and fees?

 
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3 Replies
DavidD66
Expert Alumni

I'm maxing out my employer's (government) 401k and 457 plans. May I additionally contribute to a separate "backdoor" Roth IRA, without incurring penalties and fees?

Yes.  Your employer provided retirement plan contributions have no impact on your eligibility to do a backdoor Roth.  As long as you are eligible to make a non-deductible contribution to a Traditional IRA, you are eligible to do a backdoor Roth.  There will be no fees or penalties.

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I'm maxing out my employer's (government) 401k and 457 plans. May I additionally contribute to a separate "backdoor" Roth IRA, without incurring penalties and fees?

Apologies for my ignorance. How do I know if I’m eligible to make a non-deductible contribution to a traditional IRA? My original concern was that the traditional IRA and 401k “buckets” are treated as one in the same, such that if I’m maxing out the 401k, I can’t pass any additional funds through the Traditional IRA (for purposes of funding the backdoor Roth) without exceeding the yearly max.

dmertz
Level 15

I'm maxing out my employer's (government) 401k and 457 plans. May I additionally contribute to a separate "backdoor" Roth IRA, without incurring penalties and fees?

The amount in box 1 of your W-2 minus any amount in box 11 is compensation that will support a traditional IRA contribution.  Otherwise, the amount that you contribute to a 401(k) or a 457(b) is not a factor in determining the amount that you are eligible to contribute to a traditional IRA.  (If you defer all of your available compensation to to the traditional 401(k) and the 457(b) accounts, there would be a zero in box 1 of your W-2.)

 

There is no limit on the amount that you are eligible to convert to Roth.

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