Job switching and Roth 401k contribution limit

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investing engineer
Posts: 132
Joined: Thu Aug 27, 2015 5:14 pm

Job switching and Roth 401k contribution limit

Post by investing engineer »

During 2021, would I go over the limit if I contribute to company A's Roth 401k plan all the way to $19500, and switch to company B and contribute to B's Roth 401k plan all the way to $19500?

Edit: The reason I'm asking is that I'm not sure whether contributions to company B's Roth 401k plan can be seen as part of Mega Backdoor Roth.
Last edited by investing engineer on Mon Jun 21, 2021 1:13 am, edited 1 time in total.
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Metsfan91
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Joined: Sat Jan 11, 2020 12:33 pm

Re: Job switching and Roth 401k contribution limit

Post by Metsfan91 »

investing engineer wrote: Mon Jun 21, 2021 12:31 am During 2021, would I go over the limit if I contribute to company A's Roth 401k plan all the way to $19500, and switch to company B and contribute to B's Roth 401k plan all the way to $19500?
Yes. 19500 is the limit for the year. One can split it among many different employers. But, one not go over it.
“Time is your friend; impulse is your enemy.” — John C. Bogle
Topic Author
investing engineer
Posts: 132
Joined: Thu Aug 27, 2015 5:14 pm

Re: Job switching and Roth 401k contribution limit

Post by investing engineer »

Metsfan91 wrote: Mon Jun 21, 2021 1:02 am
investing engineer wrote: Mon Jun 21, 2021 12:31 am During 2021, would I go over the limit if I contribute to company A's Roth 401k plan all the way to $19500, and switch to company B and contribute to B's Roth 401k plan all the way to $19500?
Yes. 19500 is the limit for the year. One can split it among many different employers. But, one not go over it.
Thanks, I've updated my question to clarify my doubt: Can contributions to Company B's Roth 401k plan count as Mega Backdoor Roth contribution?
fyre4ce
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Re: Job switching and Roth 401k contribution limit

Post by fyre4ce »

You are allowed only one “elective deferral” per year, which is $19,500 into traditional (pre-tax) or Roth accounts. This is regardless of how many jobs you have, and whether you work them concurrently or serially.

The mega-backdoor Roth is done by making after-tax (not traditional, not Roth) contributions, and there is no annual per-person limit on these. The only limit is the per-plan limit of $58,000 (inclusive of all elective deferrals, after-tax, and employer contributions), but if you happen to work multiple jobs, you can legally contribute $58,000 after-tax into each, provided the employers are unrelated.
phantom0308
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Location: San Mateo, CA

Re: Job switching and Roth 401k contribution limit

Post by phantom0308 »

A mega backdoor Roth requires you to contribute to an after tax 401k then rollover to either a Roth 401k or a Roth IRA. If either of those steps aren’t possible then you can’t do it.
19.5k regular limit is per person, 58k mega limit is per plan.
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