Mega Backdoor Roth - Uncertainty Around 6-Month Suspension

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Mega Backdoor Roth - Uncertainty Around 6-Month Suspension

Post by DarkHelmetII »

Facts below. What would you do? Not doing backdoor Roth currently out of concern for losing 6-months of match after withdrawing to a Roth IRA. And if I don't periodically do the withdrawal I have essentially converted capital gains taxation (if I had put $$ into a taxable account) into ordinary income tax.

Fact #1 - Plan Verbiage
"You may request up to two regular withdrawals a year. Regular withdrawals may be taken from: • Your after-tax savings and their earnings—you may withdraw after-tax contributions, but your contributions will be suspended for 6 months if you do so. • Rollover contributions and their earnings"
Ambiguity: is suspension for after-tax only or for all three buckets (pre-tax, Roth, and post-tax)

Fact #2 - Calls to Fidelity (they manage the 401k)
After 5+ plus calls over 4+ years, every single phone agent is adamant that suspension applies to all three buckets

Fact #3 - There is No True-up
So if I accelerate my 401k contributions to max out in the first half of the year, I miss on matches for second half of the year

Fact #4 - HR Says Suspension Applies to All Three Buckets

Fact #5 - Co-worker Claims To Have Done a Post-Tax to Roth IRA Withdrawal and NOT been suspended for pre-tax and Roth

Fact #6 - Match is 5% (technically 100% of first 4% and 50% of next 2 %)
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