A mega backdoor Roth presents a wonderful opportunity to potentially save over $40,000 more into a Roth every year, even if you make too much money for a Roth IRA. We'll cover how a mega backdoor Roth works, as well as how you can take advantage of it. Every year the IRS tries to incentivize us through tax breaks on retirement accounts. Unfortunately, these contributions are capped for the 401(k). For 2022, you can contribute $20,500 ($27,000 age 50 and older) . And for an IRA, it's $6,000 ($7,000 age 50 and older). And additionally, if you make too much money for a Roth IRA, you might not be able to contribute. You might be a little confused if you look up the max 401(k) contribution because you might see a number that's a heck of a lot larger than $20,500, and that number is $61,000 ($67,500 age 50 and older). So, what's going on here? Well, if we include the employer side of the 401(k) contribution, we're capped at $20,500, but the employer can make
Timothy Sumer is a philanthropist and motivational speaker empowering young entrepreneurs across the nation. He speaks on starting new businesses and the importance of branding in the digital age. Timothy Sumer has a BA in Accounting from NYU and a Masters in Information Technology from MIT. Tim enjoys traveling around the globe, driving exotic sports cars, molecular gastronomy, exploring new cultures, and keeping on top of the latest technology trends. Hope you enjoy Timothy Sumer's page :)