Three Lesser-Known But Powerful 401(k) Features
Summary
Host Robert Brokamp explores three underutilized 401(k) features: self-directed brokerage accounts, the "mega backdoor Roth" strategy, and the Rule of 55. He explains how these tools can expand investment choices, allow for additional after-tax contributions, and enable penalty-free withdrawals at age 55. Brokamp advises listeners to check their plan documents for availability and consult financial professionals, noting that not all employers offer these options.
Topics discussed
Intro, National 401(k) Day, and upcoming mailbag
Overview of three lesser-known 401(k) features
Self-directed brokerage accounts in 401(k)s
Sponsor: Charles Schwab trading and market update
Mega Backdoor Roth: contribution limits explained
After-tax contributions vs. Roth and taxable accounts
Rolling after-tax contributions to IRAs
In-plan Roth conversions and the Mega Backdoor Roth
Non-discrimination testing and plan limitations
Sponsor: Range Rover Sport advertisement
The Rule of 55: penalty-free withdrawals
Public safety employees and age 50 exception
Tax implications and closing remarks
Disclaimer and sign-off
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