• If you believe that federal income tax rates won’t increase in the future.
• If you can’t afford to give up a big chunk of your paycheck while you are employed.
“If you have nondeductible high-interest debt, you should pay that off first,” Vento said.
“This strategy is a great idea for the solo 401(k) crowd,” Lanter said. “An individual could establish a solo 401(k) that allows both after-tax contributions and in-service distributions at the outset. The plan could also be set to allow no employer contributions. ... Then they’d use the mega backdoor strategy to sweep all $37,000 into a Roth IRA on a calendar year basis. The participant is paying tax on the additional $37,000 no matter what, but getting those funds into a vehicle that offers tax-free growth for life is a rare find.”