White coat investor posted a recent article earlier today about The Mega Backdoor Roth IRA
http://whitecoatinvestor.com/the-mega-b ... -roth-ira/
His first variation caught my eye
This sounds too good to be true..is it?Variation # 1 – The employee with a unique 401K
Some 401Ks not only permit $17.5K of either tax-deferred or Roth contributions, but ALSO permit you to contribute your own, after-tax money into the plan up to the $52K limit. A good example of this is the TSP for deployed military doctors. It isn’t a particularly good deal to just contribute after-tax money, UNLESS you can then get that money out and convert it to a Roth. Voila- A Mega Backdoor Roth IRA. Instead of only being able to contribute $5.5K per year, all of a sudden you can contribute $34.5K (plus the $5.5K in your personal and $5.5K in your spousal IRA.) If you’re over 50 and put your first $23K (remember the $5.5K catch-up contribution) into a Roth 401K, you could potentially put up to $65K per year into a Roth IRA. Here are the requirements:
The plan must allow for after-tax contributions above and beyond the $17,500 employee contribution limit, preferably up to the $52,000 limit. So you can put in your $17,500 that is either tax-deferred or Roth, then contribute another $34,500 to the plan in after-tax dollars, similar to a non-deductible traditional IRA.
The plan must allow for non-hardship in-service withdrawals of after-tax contributions.
The plan should prohibit non-hardship in-service withdrawals of tax-deferred contributions (not mandatory, but a useful feature.)
The plan should allow for “lump sum” contributions (not mandatory, but useful.)
Even if your plan doesn’t allow in-service withdrawals (like the TSP), if you are separating soon from the company (or military), you may be able to isolate that basis and accomplish the same thing like I did after I left the military. This is a great deal for someone who has limited tax-protected (and asset-protected) accounts but would like to save more for retirement. Unfortunately, most 401Ks don’t allow after-tax contributions. Check and see if yours does. Be sure the person you’re asking understands you’re not talking about Roth contributions, but contributions above and beyond the $17,500 limit.
Can this be done also in combination with the regular back door roth ira trick?
Can this be done every year?
Do I have to have the money in my 401k for 5+ years before I can roll it over like my roth portion of my 401k demands?