Sam Taube

Some target date funds are cheaper than others.

NerdWild's article on low-cost target date funds, which we can link to in the show notes, is a good resource to check for fees.

Now, as far as comparing performance, our article on low-cost target date funds at the moment is really just focused on fees and it doesn't show performance over time.

But you can use any kind of mutual fund screener like Fidelity or Morningstar to look at performance.

Yeah, as Doug is describing, it's a technique where you make after-tax contributions to your 401k and then you roll the after-tax balance over into a Roth IRA or an after-tax 401k.

It's best known as a workaround for people whose incomes are too high to contribute to a Roth IRA directly, or it can also be useful if you've already maxed out your 401k deferral, but you still want to contribute more to your 401k.

Now, I usually think of the mega backdoor Roth rollover as a one-time maneuver, and doing it every two weeks sounds kind of labor-intensive to me, but I guess I can see the logic.

If you're just rolling over after tax funds that you contributed recently, then the taxes you have to pay are probably minimal.

The contributions are already after tax, so they don't generate a tax bill.

You would just be paying taxes on the investment gains that those contributions have made in two weeks.

And two weeks isn't a very long time in investing terms, so that's probably not going to generate much of a tax bill.

It does sound like a lot of work to me.

But yeah, tax-free growth is nice.

And also, Roth IRAs do offer a little more flexibility in terms of withdrawals than traditional accounts do.

You can withdraw contributions tax-free at any time.

You can withdraw up to $10,000 in earnings for a first-time home purchase after the account has been funded for at least five years.

And the rules around required minimum distributions are much looser once you hit retirement age.

But is that worth just the amount of paperwork and time and aggravation that's involved in doing something like this?

I don't know.

I think that that's going to be a question for every individual listener to answer for themselves.