IRS 2014-54 After-tax 401k contribution and conversion
Individual (age 60 and a few months from retirement) has option to contribute an unlimited amount of money to the after-tax portion of his government retirement plan. He’s considering $250,000. He plans to make the contribution shortly before he retires and convert the entire amount to a Roth IRA. He has a traditional IRA.
1. Does the 5-year withdrawal rule apply?
2. Does the existence of the traditional IRA play into the pro-rata rule?
3. If the answers to 1 and 2 are no, are there any other problems with this plan?
Permalink Submitted by Alan - IRA critic on Tue, 2014-12-09 01:34
Permalink Submitted by Bruce Steiner on Tue, 2014-12-09 03:20
Permalink Submitted by Deborah Gdisis on Tue, 2014-12-09 19:02
To BSteiner and Alan,It is a CSRS VC, with a 10% cumulative salary “limit.” I didn’t see anything about an annuity in my reading, and he didn’t mention it as an option. Thanks very much for your replies.