I split our 401k into two buckets Pretax dollars and Roth dollars to make sure we hit our Roth IRA contributions income limits to be able to contribute a max Roth IRA for wife and myself.
Is that a good idea?
We both our maxing out 401k with catch ups and my wife plan allows a $10,000 contribution to after tax portion so we are contributing $64,000 to 401k’s and another $14,000 to Roth IRA for a combined total of $78,000.
I was thinking of doing a back door Roth but I have two much pretax IRA which will cause them to prorate.
Because the OP is using the “Catch-up” contribution he can contribute up to $27,000 for the 401k as can his spouse, total is $54,000 and not the $64,000.
The $54,000 contribution is split somehow between tax deferred (traditional) and Roth (after tax). They are also contributing $7,000 each to their Roth IRAs. This sounds good to me.
The fact that a “backdoor Roth contribution” seems cost prohibitive is OK too. Transferring the tax deferred 401k contributions to a traditiioal IRA will allow for the tax free Qualified Charitable Contributions.