Does your biglaw firm’s 401(k) plan allow for Mega Backdoor Roth contributions? [POLL] Forum

[The Lsat Airbender]

Can somebody please check to see if Willkie Farr allows this, before the new year? TIA!!

lol? If you work there now, call the plan provider and ask to be converted ASAP. If you don't work there now, not sure why you care about 2021

[Anonymous User]

Can somebody please check to see if Willkie Farr allows this, before the new year? TIA!!

lol? If you work there now, call the plan provider and ask to be converted ASAP. If you don't work there now, not sure why you care about 2021

And if you don't work there yet but are considering an offer, this is a perfectly valid question to ask a recruiter! Ask if their 401(k) plan allows after-tax contributions and Roth conversions.

[Anonymous User]

Can somebody please check to see if Willkie Farr allows this, before the new year? TIA!!

They do not.

[Anonymous User]

Anyone knows if Barnes & Thornburg allows Mega Backdoor Roth?

[Anonymous User]

Any data on Proskauer?

[Anonymous User]

Any data on Proskauer?

No, PR does not allow after-tax contributions or in-service withdrawals

[Anonymous User]

.

[Anonymous User]

Does anyone know if Williams & connolly allows for this?

[Anonymous User]

Latham’s plan allows to Roth IRA the OP should be updated.

[Anonymous User]

Does Cleary allow for after tax contributions? I know they don;t allow in service conversions.

Based on averages I wont be in biglaw more than 4-5 years, so it might make sense to make the contributions and then convert them to roth once I exit.

Would appreciate hearing from folks at other firms as well to see if anyone has pursued this.

[Anonymous User]

WilmerHale allows the mega backdoor Roth, so OP should update that as well.

[Anonymous User]

As a STB associate who has talked to Fidelity about this the answer isn't a simple Yes.

You can make after tax contributions, but you can't roll them to a Roth while still employed unless you want to be barred from making new contributions. While those contributions sit in your 'normal' 401k, they incur a future tax obligation that would otherwise be avoided if they rolled into the roth.

Don't think the chart should be a simple 'yes' for STB given that situation.

I'm sure you saw this if you're still with STB, but just as a general FYI STB removed this restriction on post-tax contributions after an in-service withdrawal in Nov. 2021. So the answer is much closer to a simple yes now (barring brokerage-related hoops you have to jump through).

This is still confirmed true? STB allows MDBR after in service withdrawals?

[Anonymous User]

Current STB associate here. I looked into this last year and asked Fidelity about whether we could do in service withdrawals. The answer was no. So I would not rely on anything said on this forum as definitive.

[Anonymous User]

Current STB associate here. I looked into this last year and asked Fidelity about whether we could do in service withdrawals. The answer was no. So I would not rely on anything said on this forum as definitive.

Thanks - that's too bad. Do you still contribute to a 401K after tax or do you just invest in a traditional brokerage acct?

[Anonymous User]

Current STB associate here. I looked into this last year and asked Fidelity about whether we could do in service withdrawals. The answer was no. So I would not rely on anything said on this forum as definitive.

Hi, also a current STB associate. You can definitely do it (I am and have been for multiple years now without issue). The sad state of affairs is that the majority of the folks at Fidelity just don't seem to know how or what the MBDR is. They also told me it was not possible multiple times when I asked a couple of years ago, but I eventually go through to someone who helped me arrange for it after I insisted our plan docs suggested it could be done.

You can do in-service withdrawals specifically of the after-tax contributions, and on our net benefits page if you go to the loans and withdrawals option you could pull out your after tax-contributions as a "pre-approved" withdrawal without ever calling to speak to someone so long as you don't mind going through the 60 day rollover path (i.e. funds hit your account and you have to deposit the correct amount (plus any minimal tax withholding their may be) into your Roth IRA and indicate that it is a 60 day rollover.

[Anonymous User]

Current STB associate here. I looked into this last year and asked Fidelity about whether we could do in service withdrawals. The answer was no. So I would not rely on anything said on this forum as definitive.

Hi, also a current STB associate. You can definitely do it (I am and have been for multiple years now without issue). The sad state of affairs is that the majority of the folks at Fidelity just don't seem to know how or what the MBDR is. They also told me it was not possible multiple times when I asked a couple of years ago, but I eventually go through to someone who helped me arrange for it after I insisted our plan docs suggested it could be done.

You can do in-service withdrawals specifically of the after-tax contributions, and on our net benefits page if you go to the loans and withdrawals option you could pull out your after tax-contributions as a "pre-approved" withdrawal without ever calling to speak to someone so long as you don't mind going through the 60 day rollover path (i.e. funds hit your account and you have to deposit the correct amount (plus any minimal tax withholding their may be) into your Roth IRA and indicate that it is a 60 day rollover.

Awesome. I was hoping this was the case. I don't know much about the mechanics but will be starting at STB in the fall. I was wondering, do you need to manually roll over every time you put $ into your post tax 401k or is it automated after you indicate you want to utilize the MBDR?

[Anonymous User]

Current STB associate here. I looked into this last year and asked Fidelity about whether we could do in service withdrawals. The answer was no. So I would not rely on anything said on this forum as definitive.

Hi, also a current STB associate. You can definitely do it (I am and have been for multiple years now without issue). The sad state of affairs is that the majority of the folks at Fidelity just don't seem to know how or what the MBDR is. They also told me it was not possible multiple times when I asked a couple of years ago, but I eventually go through to someone who helped me arrange for it after I insisted our plan docs suggested it could be done.

You can do in-service withdrawals specifically of the after-tax contributions, and on our net benefits page if you go to the loans and withdrawals option you could pull out your after tax-contributions as a "pre-approved" withdrawal without ever calling to speak to someone so long as you don't mind going through the 60 day rollover path (i.e. funds hit your account and you have to deposit the correct amount (plus any minimal tax withholding their may be) into your Roth IRA and indicate that it is a 60 day rollover.

Awesome. I was hoping this was the case. I don't know much about the mechanics but will be starting at STB in the fall. I was wondering, do you need to manually roll over every time you put $ into your post tax 401k or is it automated after you indicate you want to utilize the MBDR?

No automated rollover, unfortunately (although I hear it is possible with Fidelity, but the plan provider has to opt-in and we have not). So, you either have to call periodically or log in on the website to manually request the pre-approved withdrawal of after-tax contributions.

By phone, Fidelity told me they had to send me a physical check that I would then have to forward on to my Roth IRA since it was through a different servicer, so I have opted to take the online route and have the after-tax amount sent via direct deposit to my bank account. Then, when I deposit at M1 (who I use for my Roth) there is a checkbox for me to indicate if it is a 60-day rollover. So, I typically go in and take care of that process every couple of weeks. It is a bit annoying since the direct deposit takes 1-2 business days, but eh. Maybe it'd be easier if I was rolling over to a Roth IRA at Fidelity, but I'm not 100% sure.

[Anonymous User]

Do after tax contributions have to be sourced from payroll? I just realized my firm’s plan offers the MBDR. I have enough saved in a HYSA and was hoping I could just transfer funds rather than have it come out of my paychecks

[Anonymous User]

Any information on Quinn, Covington, or Wilmer?

[Wanderingdrock]

Do after tax contributions have to be sourced from payroll? I just realized my firm’s plan offers the MBDR. I have enough saved in a HYSA and was hoping I could just transfer funds rather than have it come out of my paychecks

At my firm the MBDR is done through one contribution, drawn from your bank account, with the rollover coordinated by the firm. The opportunity to do this is offered twice per year (you pick one). I believe for MBDR this is the more common way to do it, as it's simplest for employees and cleanest in terms of preventing taxable earnings from accruing.

[Anonymous User]

Do after tax contributions have to be sourced from payroll? I just realized my firm’s plan offers the MBDR. I have enough saved in a HYSA and was hoping I could just transfer funds rather than have it come out of my paychecks

At my firm the MBDR is done through one contribution, drawn from your bank account, with the rollover coordinated by the firm. The opportunity to do this is offered twice per year (you pick one). I believe for MBDR this is the more common way to do it, as it's simplest for employees and cleanest in terms of preventing taxable earnings from accruing.

As a counterpoint, at mine it's a payroll deduction that runs straight through Fidelity (who then handle the rollover on their end).

[Anonymous User]

Do after tax contributions have to be sourced from payroll? I just realized my firm’s plan offers the MBDR. I have enough saved in a HYSA and was hoping I could just transfer funds rather than have it come out of my paychecks

At my firm the MBDR is done through one contribution, drawn from your bank account, with the rollover coordinated by the firm. The opportunity to do this is offered twice per year (you pick one). I believe for MBDR this is the more common way to do it, as it's simplest for employees and cleanest in terms of preventing taxable earnings from accruing.

As a counterpoint, at mine it's a payroll deduction that runs straight through Fidelity (who then handle the rollover on their end).

Following up, my firm’s plan through Schwab only allows payroll deductions. I guess I could contribute the majority of my after-tax pay the rest of the year to reach the $43.5k limit. Though it’s no issue if I just live off the funds stored in my savings, it’s just gonna feel a bit weird having significantly “smaller” paychecks

[Anonymous User]

Covington does. Conversion is in-plan, so I assume the vehicle is a Roth 401(k) rather than an IRA.

[showusyourtorts]

Do after tax contributions have to be sourced from payroll? I just realized my firm’s plan offers the MBDR. I have enough saved in a HYSA and was hoping I could just transfer funds rather than have it come out of my paychecks

At my firm the MBDR is done through one contribution, drawn from your bank account, with the rollover coordinated by the firm. The opportunity to do this is offered twice per year (you pick one). I believe for MBDR this is the more common way to do it, as it's simplest for employees and cleanest in terms of preventing taxable earnings from accruing.

As a counterpoint, at mine it's a payroll deduction that runs straight through Fidelity (who then handle the rollover on their end).

Following up, my firm’s plan through Schwab only allows payroll deductions. I guess I could contribute the majority of my after-tax pay the rest of the year to reach the $43.5k limit. Though it’s no issue if I just live off the funds stored in my savings, it’s just gonna feel a bit weird having significantly “smaller” paychecks

My old firm was the same, and I had previously done the same: when I realized mid-year that I could do this, I caught up by contributing 75% of my paychecks to the MBDR until I hit what I wanted (and/or felt uncomfortable with how low my emergency fund was getting). Random, but my firm only let us do up to 75% of our paycheck, for some reason.

[The Lsat Airbender]

Random, but my firm only let us do up to 75% of our paycheck, for some reason.

probably to prevent people from going negative, net of withholdings (although 75% might be too low for that unless it's pre-tax?)