Sean Pyles

So I'm all about doing this online.

Sam, question about why you do it this way as part of your new job checklist.

Is it just so you have everything consolidated?

Like, what if you experience what our listener is debating and thinking, oh, maybe my old job actually had a better investment option?

How do you think about that?

And this is one of those things where, you know, you're going to want to do it eventually.

So you might as well while your old employers 401k is still kind of top of mind and you don't suddenly remember it 30 years down the road and you're like, oh,

crap what happened to all that money I was investing when I was in my 20s.

Well, Doug also wants to know how to assess the performance of each of these accounts to see which is doing best.

It sounds like money in each account is invested in target date funds.

So Sam, can you outline the factors that folks should consider as they compare target date funds and decide which is the best for their retirement savings?

And also, I want to hear about comparing performance of different target date funds over time, since that's a primary concern for Doug.

All right, it sounds like our listener Doug here is describing the administrative annoyance and overhead involved in a mega backdoor Roth IRA.

So Sam, can you explain what a mega backdoor Roth IRA is?

Yeah, you did a great job explaining what is a really complicated and frustrating part of rollovers.

People deal with the pro rata rule all the time with things like IRA rollovers, but we'll keep it focused on the 401ks for now.

I'll also add that the pro rata rule applies to earnings on contributions after you've put money into an after-tax 401k.

So with Doug's coworkers, they're putting money into this after-tax retirement account, right?

If the money they put into that account grows due to investment performance before they convert it, they'll owe taxes on that growth amount due to the pro rata rule, which you touched on briefly earlier.

Mm-hmm.