Suze Answers Your Mega Retirement Plan Strategy Questions

Summary

Podcast Summary: Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

Episode: Suze Answers Your Mega Retirement Plan Strategy Questions
Date: January 8, 2026
Host: Suze Orman and KT
Duration: ~36 minutes

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Episode Overview

In this highly engaging Ask KT & Suze Anything edition, Suze Orman fields questions from listeners about her recent "mega retirement plan" strategy episode (January 4, 2026). The central theme is understanding advanced retirement account strategies—especially the mega/backdoor Roth maneuvers, new 2026 legislation, and how different employer plans interact with these opportunities. Suze clarifies common confusions about income limits, contribution rules, and how employer options affect your choices. Her trademark warmth, directness, and humor shine through, making complex strategies accessible and inspiring.

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Main Discussion Points & Insights

1. Mega Backdoor Roth & Pro Rata Rule (05:41, 07:56)

• Listener Shelby’s Story: At 62, Shelby went from zero financial security at 40 to $3 million in retirement savings, $300K emergency fund, and a mortgage as her only debt.
  • Suze: Uses Shelby’s success to inspire listeners, especially younger ones feeling behind. "People like Shelby…who went from nothing to seriously having a lot of money."
• Question: Does the pro rata rule apply to mega Roth conversions from employer 401ks?
  • Suze: "Individual Retirement accounts have nothing to do with an employer account...the pro rata rule does not apply when putting in [after-tax] money [to an employer plan]." (09:54)
  • Explains distinction between IRAs (where pro rata matters) and employer plans (where it does not).

2. After-Tax 401(k) Contributions & Importance of Employer Plan Rules (10:09, 10:50)

• Laura asks about after-tax 401k using the 415 rule at age 33, with only a regular 401k available.
  • Suze: "If the employer...does not offer a Roth 401k or allow in-plan transfers, you do not want to do a 415C. You're far better off with a Roth IRA (or backdoor Roth IRA if eligible)." (12:30)
  • Key Takeaway: Employer must offer necessary plan features for these strategies to work.

3. Catch-Up Contributions & The $150,000 Rule (15:28, 15:39, 18:49)

• Kelly asks: "If I make over $150,000, do I have to put all my contribution into a Roth?"
  • Suze: Only catch-up contributions (for those 50+) must go into the Roth 401k/403b if 2025 W-2 shows $150,000+; base deferral can remain pre-tax.
  • Clarification: If no Roth plan, employer must create one or employees lose the ability to make catch-up contributions. (19:47)
  • Suze: "Your corporation has no choice but to either get a 401 Roth or...say to the employees, you can no longer make a catch-up contribution. They are wrong, wrong, triple wrong, quadruple wrong." (19:47)

4. Employer Knowledge Gaps & Financial "Fakers" (21:07, 21:13)

• Listener reports HR advised ignoring new catch-up rules.
  • Suze: Expresses strong frustration at uninformed HR. "It's OK for somebody to say, 'I don't know, but I'll find out,' rather than pretend...I hate financial fakers." (21:13)

5. Maximizing After-Tax Plan Contributions: The Math of 415(c) (22:00, 23:11)

• Marlee's Case: Maxes Roth 403(b), does in-plan conversions of employer match, and invests extra in a brokerage account.
  • Suze: "You take [employee + employer contributions], subtract that from $72,000, and that's how much more you can put in after-tax (415c)...That's a whole lot of money." (24:41–25:50)
  • This allows significant tax-advantaged savings beyond the backdoor Roth IRA.

6. The TSP (Thrift Savings Plan) Exception (30:09, 30:57)

• Tommy asks: Can he do a 415(c) in the TSP due to upcoming in-plan conversions?
  • Suze: "For a TSP, they do not allow 415 mega backdoor...They do allow in-plan conversions starting January 28th...for combat zone tax exempt (CZTE) pay, extra contributions are allowed." (31:17–33:30)
  • Note: Armed service members in a combat zone can contribute well above the standard limit, then do in-plan Roth conversions for powerful tax advantages.

7. Duration and Eligibility for These Strategies (34:17)

• KT asks: How long can you take advantage of these?
  • Suze: As long as you’re working and have eligible earned income. Once retired or taking RMDs, these strategies generally no longer apply.

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Notable Quotes & Memorable Moments

• On Shelby's Success:
  "Many of you listen to this podcast and maybe you're younger...it's because of people like Shelby...who went from nothing to seriously having a lot of money." — Suze (06:16)

• On HR Giving Bad Advice:
  "You make them money...and then you go to somebody who needs to know the correct answers...and [they're] lazy enough to not even say 'let me find out.'" — Suze (21:13)

• On the $150,000 Rule:
  "If your employer doesn't get [a Roth 401k], you are not going to be allowed to make a catch-up contribution...They are wrong, wrong, triple wrong, quadruple wrong." — Suze (19:47)

• On Using ChatGPT for Financial Rules:
  "You have to be very, very careful when you're using any artificial intelligence to answer a question...they are using figures from last year, two years ago...you are 100% wrong." — Suze (28:01)

• On Military Savers:
  "Katie and I so love the armed forces...I do know their plans inside and out...If you’re in a combat zone, you are allowed after your normal contributions...to put in extra money up to the 415C limits." — Suze (30:44–32:10)

• Episode Motto:
  "People first, then money, then things." — KT (35:50)

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Key Timestamps for Important Segments

• 01:21 — Suze explains format: answering questions about last Sunday’s complex "mega retirement" podcast
• 05:41 — Shelby’s inspiring success story & question, leading into pro rata/backdoor Roth clarification
• 10:09 — Laura asks about after-tax 401k, 415(c), and what to do when plan doesn’t offer Roth
• 15:28/15:39 — Catch-up contribution questions ($150,000 rule)
• 18:49 — Employee told by HR to ignore new rules—Suze’s strong response
• 23:11 — Detailed math on 415(c) after-tax contributions
• 30:09–33:30 — TSP (Thrift Savings Plan) rules, new in-plan Roth conversion, and the combat zone exception
• 34:17 — How long you can use these strategies
• 35:50 — Closing mantra

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Structure & Flow

• Lively banter establishes friendly tone (accidentally not recording the first take, movie/music references)
• Questions are read by KT; Suze gives direct and thorough answers
• Emphasis on listeners’ real-life success, breaking down technical content into actionable advice
• Suze punctuates key points with strong opinions and passionate encouragement, maintaining accountability for financial professionals and employers alike

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Final Thoughts

This episode is an essential listen/read for anyone with a 401k, 403b, TSP, or IRA seeking to fully leverage retirement accounts in 2026 and beyond. Suze’s advice is clear: learn the rules, pressure your employer for robust plan offerings, and don’t let mediocre HR guidance or online misinformation keep you from maximizing your future wealth. The theme of hope—no matter your starting point—runs throughout, and the practical, immediate tips are invaluable.

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Mantra to remember:

"People first, then money, then things." — KT (35:50)

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Transcript

[A]

Hi, everybody. Suzio here. Now, what is the goal of money? The goal of money is for you to be secure. And there is no better way for you to be secure than having an emergency savings account. It is essential for your financial foundation. So all of you should be participating in the Ultimate Opportunity savings account at Alliant Credit Union. Go to myalliant.com to find out more. And be secure.

[B]

Good morning, Susie. Are we recording?

[A]

Why are you asking me that? Tell them what we just did.

[B]

Kt. We just did the best podcast on earth. And she just looked at me and said, kt, you're going to kill me. And I said, don't tell me she didn't record it.

[A]

I didn't push the button hard enough.

[B]

Push the button, baby. Push my button. Push the button. She's pushing my buttons right now. Okay, so today is January 8, 2026. We just had an extraordinary great week. And the one thing that we did that we haven't done in 14 years.

[A]

Was did you welcome everybody to the Women in Money podcast?

[B]

Because I welcomed them three times already this morning.

[A]

So everybody welcome to the Women in Money podcast. And everybody smart enough to listen, but not every host that's smart enough to push the record button. But anyway, this is the Ask KT and Susie Anything edition. Although I'm not sure she's going to talk to me for a few minutes here. But if you want to write in and ask a question, write into asksusie s u z e podcastmail.com and if you write in, keep it short and KT picks it. Oh, we will answer it on the podcast. What were you saying now?

[B]

So I was telling everyone that we really had a great week despite Susie messing up the. The beginning of this podcast.

[A]

Katie, it was only a 45 minute podcast.

[B]

Oh my goodness.

[A]

It was so good, everybody.

[B]

It was so great. So I'm not gonna sing again. I was singing and she cut me out.

[A]

I didn't cut you out.

[B]

So tell them what I was singing. You sing it.

[A]

I'm not gonna sing it. You know I don't sing.

[B]

Yes, you can.

[A]

Everyone can sing. It's Katie. They don't even have a clue what we're talk. So tell them what we did. Go on.

[B]

Great movie called Song Song Blue. Everybody knows one.

[A]

Yeah, baby.

[B]

Okay. We saw the new movie song Sung Blue featuring my, my big hero, Hugh Jackman. And now Kate Hudson. Kate Hudson. Who knew you could sing like that?

[A]

Wow, she's great. She's up for, you know, she's up.

[B]

For both of them. Should get Oscars, Golden Globes, you name it, they should get them all. They were brilliant.

[A]

So here's what's interesting, everybody, is that I was telling KT in the previous podcast that never got recorded, right? Is that I thought that maybe we should start telling people what we do during the week.

[B]

Wait, let's ask them. Are you interested?

[A]

They wrote me and told me that they loved the fact that we talked on Sunday, last Sunday about Landman and what we did on New Year's Eve. And now I've had at least 50 emails that I've read saying, oh, my God. I immediately went and I watched Landman. It's on Paramount plus and fabulous, fabulous Susie. I can't wait. It's the best thing I've ever seen.

[B]

It's really good. Good, good.

[A]

And here's what's so fascinating is after we went to the movie on Sunday, we went last Sunday, okay, we go to the movie and on Sunday is when the new episodes show of Landman, we come back, we're watching it, and they go into this, like, bar and what happens, Katie?

[B]

Neil diamond, they were playing Neil Diamond, Sweet Caroline, which was really, really fun since we just watched. Well, we can't give it away. We can't tell anyone about the movie.

[A]

We're not by you telling people that they sing. So Sweet Caroline in a Neil diamond movie, I don't think is giving anything away, Ms. Travis, but sweet Caroline, the song plays a big part in that movie. And for us to come back and a few hours later turn on Landman, which we were so excited to do, so excited, we actually watched it twice, believe it or not, and have them sing that song we went, Whoa. All right, Ms. Travis, we're going to now do the podcast again, everybody. And really, this podcast is going to be answering the questions that a lot of you had about last Sunday's podcast. Now listen to me. If you didn't listen to last Sunday's podcast, I really want you to listen to it. January 4, 2026. I don't care when you're listening to this podcast, whether it's today, whether it's five months from now, you have got to go back and list to the January 4, 2026 podcast. Because what I tell you about in there, you really need to know and understand because it is a little complicated. Many of you had questions. So we invited you all to write in your questions and that's what we're going to answer right now. All of these pertain to last Sunday's podcast. Go for it. Girlfriend.

[B]

Well, I'm starting with Shelby. I love what Shelby has to say to you. Ms. Sus said, thank you for all you do. I am one of those who had zero savings, some credit card debt, and no retirement when I was 40. Now at 62, I own my own home. I have $3 million in retirement savings, over 300,000 in emergency savings, and zero debt except for my mortgage.

[A]

Wait, can I just stop you right there?

[B]

Sure.

[A]

She just rolled her eyes at me. Everybody again. Anyway, the reason I loved KT that you chose this. By the way, I answered Shelby directly because she just complimented me, so how could I not? No, really is many of you listen to this podcast and maybe you're younger, you're 25, 30 years of age, and you think, I'm never going to have money. This doesn't apply to me, so why should I even listen? It's because of people like Shelby and literally tens of thousands of people who have written over the years just like Shelby, who went from nothing to seriously having a lot of money. So even if you don't need or can't use what I'm telling you about right now in your life one day, if you follow me, I promise you, you will. All right, go on, kt.

[B]

Okay, so Shelby also goes on to say she has a will, revocable trust, durable power of attorney, and a health care proxy.

[A]

I must have documents. Everybody.

[B]

It's all down to Susie's expert guidance. So listen up everyone. Here's her question. I do have a question about the mega Roth conversion and the pro rata rule. If my employer permits impl conversions or rollovers, does the pro rata rule still apply? I have a traditional IRA in addition to my employer, Roth 401 and catch up accounts. So that's her question. Does it apply?

[A]

The reason KT Shelby's asking that question is because there's a backdoor Roth strategy and then there is the mega backdoor Roth strategy for a 401k. So everybody, just so you know, and you should listen to last Sunday's podcast, then you'll know why I'm telling you this now. To do a Roth ira, which is an individual retirement account that you fund with after tax dollars, which in my opinion is the absolute best retirement account, bar none. And you can have a Roth IRA and an employer sponsored Roth plan as well. However, after you make more than the modified adjusted gross income limits, check Sunday and you'll find out what I'm talking about. You no longer qualify for a Roth ira, but there is a way to go through the back door to get money in to a Roth. Even if you make too much money, it does not make any sense to do that. KT if you have a traditional ira, a pre tax one, a pre tax IRA rollover, a simple a SEP ira because there's something known as the pro rata rule which means you're going to pay taxes on that money that you put into a backdoor Roth. So you only do a backdoor Roth IRA if you do not have a traditional ira, IRA rollover or any of those. People are starting to think that that applies as well to their employer sponsored plan and it does not. Individual Retirement accounts have nothing to do with an employer account. There are no income limitations for a Roth 401, 403 or a tsp. None. So you can put money in pre tax. You can then convert it. You can do after tax contributions. The pro rata rule does not apply when putting in money. It does not apply for what we were talking about.

[B]

Okay, this question from Laura continues on what you just said. She said. Susie, I just listened to your podcast where you mentioned contributing and after tax to a 401k using the 415 rule. Is this a potential option for me If I am 33 and not eligible for catch up contributions? My employer currently only offers a traditional 401 and not a Roth option. I would love to be able to contribute additional money to my 401 after tax in this way. Thank you very much. I've learned so much from you. So what should Laura do?

[A]

Laura, Listen to me. In last Sunday's podcast everybody. I talked about two things. The 415C after tax contributions where you can put up to 72,000 if you're under 50 or 80,000 if you are 50 or older into your 401k or 403. I also talked about. However, if you are 50 years of age or older, you work for an employer and you made more than $150,000 in 2025 on your W2 form. You then can only put your catch up contributions into a Roth 401K, a Roth 403B or a Roth tsp. So Laura, you're mixing up the two. Your age therefore has nothing to do the fact that you're 33 has nothing to do with anything in terms of being able to put extra Money into your 401k under the 415 rule. However, listen closely now to me everybody. If the employer that you work for does not offer a Roth 401k or 403 now, I'm not talking about TSPs here because they do not allow 415 contributions. So forget 415 contributions right now if your plan is a TSP. So for 401ks and 403s, if your employer does not offer a Roth or they do not allow in plan transfers, which means in your 401k or 403, you can do this, by the way. However, in a TSP where you're allowed to go from pre tax to after tax, then guess what? If they do not allow that, then you do not want to do a 415C. You only want to do it if your company allows an in plan transfer if it's with an after tax contribution. Otherwise you are far better off. Laura, if you simply do what you either open up a Roth IRA if you make too much money, you do a backdoor Roth IRA if you don't have a traditional ira, or you're better off putting extra money in an investment account rather than using 415C in the plan that you currently have. All right.

[B]

All right, this next question is from Walt. And this one, wait.

[A]

I just want to clear up everything and maybe do you have a question later on about tsp?

[B]

I do.

[A]

All right, so everybody listen in a little bit because then I'll make sure you understand exactly what I was referring to with the tsp. Go on.

[B]

Okay, this is from Walt. He said, Susie, I'm 77 years old and retired. I'm no longer working. However, I'm getting payments from my 457 plan from Fidelity, right?

[A]

Yeah. It's on his W2 form going on right.

[B]

Of 75,000 for 2025, which comes on my W2. Can I use this money to cover a contribution to my Roth for 2025 up to $8,000?

[A]

So here's the scoop, everybody. In order to contribute to an individual retirement account and or even an employer account, you have to have earned income, meaning you, you have a job and you get a paycheck. Right? Somehow you earn money. He's getting his money from a 457 plan, KT, which is a pre tax deferred plan. It was from money that he earned, but he never paid taxes on it. But he's not earning it. Now it's coming out as income to him, which is why it's on a W2. It does not count for a contribution to an IRA. Next question.

[B]

All right, this is from Kelly. Susie, if I make over $150,000, do I have to put all my contribution into A Roth?

[A]

Is that the whole question?

[B]

Yeah.

[A]

All right here everybody, this is where you're being confused again. By the way, do you all have out your Susy notebooks? Well, if you don't, two things you can listen to this podcast and Sunday's podcast last Sunday over and over again. You can go on the Women and Money community app by downloading it on Google Play or Apple Apps. It's free because on the wall there I did recap of everything on Sunday's podcast. So you can do any of those things and then understand it even more. But where people are getting confused is this. Starting In January of 2026, if you are working for an employer and for that particular employer, you have earned more than $150,000. So you see that on your W2 for 2025. So last year's W2, it's what you earned in 2025, you can no longer make catch up contributions and put it into a pre tax 401k. You have got to put your catch up, which is $8,000 if you're 50 or older. So you get to catch up and put that in above the $24,500 that everybody's allowed. And if you're the ages of 60 to 63, that's $11,250 catch up. You have got to put those two catch up amounts, whichever one applies to you, into a Roth 401, 403 or tsp. So you just have to know that if your company does not have currently a Roth 401K, 403B, guess what, they have to get one. And if they don't get one, you are not going to be allowed to make a catch up contribution. If you are 50 or older, made $150,000 on last year's W2, you're not going to be able to make a catch up. Now if you make 149,000, none of this applies to you. If you make anything like under 150,000, none of this applies to you. But so many of you are making from your employer 150,000 or more, that's on your W2 and you want to make a catch up and you are 50 or older because you can only make catch ups. Everybody. If you're 50 or older, this does not apply to you. If you are under 50, it has to go into a Roth. All right, There you go.

[B]

KT Susie, I'm 61, don't get mad at me, but my employer doesn't have a Roth 401.

[A]

I'm not mad at you. I'm mad at your employer.

[B]

So I max out my traditional 401k plus make the $11,250. Catch up.

[A]

All right, so this person is either 60, 61, 62, or 63. Go on.

[B]

All right, so ready for this?

[A]

Now he's freaked out.

[B]

Yeah. He went to his employer after he heard it on Monday. This is what the employer said. Listen to this. This is what the employer said. They told me I should just do what I always have done and not worry about it. Is that true, Susie? That's what the employer said. Just do what you've always done, Bob. Don't worry about it. Mm. Look at her face, everybody. We gotta videotape these podcasts because you should see her face. She is steaming. Well, she has the thing coming out.

[A]

The law is the law. And just because you have an idiot who works in the HR department or wherever you asked and they said that to you, shame on them. In fact, why don't you simply go to them, key up your podcast to this segment right here, this question, and play it for them, or take it to your CFO or the CEO of your corporation and play it for them. They don't have a choice. If your employer. Listen, the past few years you were able to get by because this law went into effect and they allowed you to slide until January 2026 and there was no more sliding. Your corporation had no choice but to either get a 401 Roth or a 403B Roth. TSPs already have them, so that's why I'm not mentioning it here. Or say to the employees, you can no longer make a catch up contribution. They are wrong, wrong, triple wrong, quadruple wrong. And there you go.

[B]

All right, the next question is from Marlee. I'm not going to look at her right now because she's still a little red skinned.

[A]

Well, here's the thing, kt, Wait. Can we just talk?

[B]

Yeah, I know you hate when these people are.

[A]

It's. Listen, the people that you work for that you put you. You make them money. You're great employees. You do everything you can so that you make a salary, but that they do great as well. In fact, many of you put their needs in front of your own needs. In many way, you take care of their money and their products better than your own. Are you kidding me? And then you go to somebody who needs to know the correct answers about your money that they're lazy enough to not even say, wait, let me find out. And I'll get back to you. It's okay, everybody. For somebody to say, I don't know, but I'll find out rather than pretend like they know and it doesn't matter. I hate financial fakers. KT Go on.

[B]

All right, next question's from Marlee. Marley said, Susie, I'm only 47, but I'm one of the lucky ones who've listened to you for over 20 years. I make $180,000. I max out my Roth 403 with $24,500. My employer matches $9,000 a year, but that goes into my traditional 403. And then I do an in plan conversion.

[A]

Oh, you are so smart.

[B]

Yes. This is what she wants Marley to do. I do an in plan.

[A]

Is Marley a woman? How do you know? We have a boyfriend who's a Marley.

[B]

This is a lady, Marlee.

[A]

All right, go on.

[B]

I do an in plan conversion and pay taxes on it. I' putting about $45,000 a year in an investment account at Robinhood, where I have over $200,000 thanks to the stocks you told me to buy. Susie.

[A]

Some of them aren't doing so well right now.

[B]

But anyway, what is the max after tax contributions I can deposit via the 415C rule in the traditional 403.

[A]

So Marley is so smart because she's already doing in plan conversions of the $9,000 match that her employer gives her. You know, when an employer gives a match, although many of them starting to change this kt a match is you put in a dollar, they give you 50 cents or a dollar up to about 6% of your base pay, whatever it is. They all have different calculations there. It's in a pre tax one, which is how they usually fund it. So they can take it off as a tax write off. Right. Then what happens is Marley takes that money and does an in plan. It's still there. And puts it into the Roth account. Now, she has to pay taxes on it, but she's willing to pay taxes on it now. So it grows all those years tax free. But here's the thing. Marley puts $45,000 a year away. Listen to me. Everybody now into an investment account with Robinhood. Because it's in the investment account, obviously, if she buys something, she sells, something she owes taxes on, grows, maybe tax deferred, she's not paying taxes on until she sells it. But they're always going to have to pay capital gains tax or income tax on the money there. If Marley was able to take that money and rather than put it in Robinhood. And she likes the investments right in her 403B. What she could do is now employ the 415C. How much can Marley put in? Ready? This, Marley, is how you would figure it out. You're already putting in $24,500 a year. To that figure, you have to add the $9,000 of your employer's match. If you had profit sharing, if they put any other money in there, you would have to add that as well. So everything that goes into your 403 you have to add up in your particular situation. It's only $24,500 plus $9,000. That's a total of $33,500. You take that amount and you subtract it from the max of $72,000. And that will tell you how much you are allowed to put in with after tax contributions under 415 C, which in your case is $38,500. That is a whole lot of money. Think about it. Marley is going to be able to put $38,500 more eventually. It's going to go right away because she'll do an in plan conversion and into her Roth 403B versus putting that money in a taxable investment account. So she'll still be able to do $7,000 or whatever in Robinhood, but now most of that's going to be tax free with tax free growth.

[B]

All right, kt, that's a plan. That's a mega plan.

[A]

But wait, do you understand now why they're calling it the mega back door?

[B]

That's a mega. It's a mega amount of money.

[A]

A lot of money. Marley's about to get, you know, 30 some odd thousand dollars into her 403 Roth, which is far more than if she did a backdoor Roth IRA. It would only be $7,500. Now, she could do both, but do you see what I'm saying? All right, anyway, go on.

[B]

All right, so next question's from George. George said, susie, I think you made a mistake. I love these questions. I read the.

[A]

Wait, stop. George, you better be right on this.

[B]

No, no, no, wait.

[A]

You better be right that I made a mistake. Because listen, I do make mistakes.

[B]

Not that often.

[A]

And a lot of you write in and you say, susie, I don't think you're right. Da, da, da and I whatever. And it turns out you are right. And I admit it when you're right.

[B]

Well, ready for this?

[A]

So let's wait. Should we bet is he right or wrong?

[B]

I Think he's so wrong.

[A]

All right, go on.

[B]

George said, susie, I think you made a mistake. I read the limit was $145,000 at the end of 2025 for a Roth ketchup, not 150,000 like you said. Well, who's right?

[A]

He probably is somebody who went on to either chatgpt or one of those things. Things. And listen, everybody, you have to be very, very careful when you are using any artificial intelligence to answer a question. Most of them, because I test it all the time. Most of them are using figures from last year, two years ago.

[B]

They're not up to date.

[A]

They're not up to date, George, you are 100% wrong. The original amount was 145,000 indexed for inflation. If we're going to be accurate about this, George. But then they decided, oh, why should we index it for inflation? That's too complicated. Let's just make it $150,000. So starting right now, January 2026, it is absolutely $150,000 of 2025 wages. If you are 50 or older, you are only allowed to do a Roth. Catch up. Next. Kt.

[B]

This one's really kind of fun, Susie. Charlotte wrote, can I really put in after tax money on top of my regular contributions? My brother, who is a financial guy, said he did not think any employer's retirement account allows it.

[A]

Oh, I have a good idea for her brother. He should go work for the company.

[B]

That.

[A]

That guy who. Or that woman, whoever it was, right. Went to their employer who said, don't worry, just put in the 11,200 or whatever they put in. Okay? Are you kidding me? That's it. Next question. I'm not even going to insult my integrity by answering that question.

[B]

Next question is from Tommy, and it's important. He said, I have a Roth tsp. I hear they're about to allow in plan conversion. I want to do a 415C so I can eventually do a mega backdoor.

[A]

RO KT, just so you know, you can say 4:15. It's all right.

[B]

I didn't know.

[A]

It's all right. No problem.

[B]

Is that what everyone says, 4:15 or 4:1:5?

[A]

Oh, I think everybody does it however they want.

[B]

4:15 is easier to remember.

[A]

All right, so 4:15. See everybody.

[B]

All right, so what should Tommy do? First of all, can he do it?

[A]

Tommy, first of all, you need to know that in most cases, the thrift savings plan, which, by the way, everybody is usually for federal workers. Military, all military. And what's so great is Katie And I so love the armed forces, don't we?

[B]

Yeah, we visited so many bases. We loved the military. And for those of you that don't know, Susie was for many many years the official personal finance educator for the.

[A]

Armed forces and for the Army Reserve. However, so I do know their plans inside and out. However, for a TSP they do not allow 415 mega back door. Just so you know, they do not allow it. They do allow you however starting January 28th to do in plan conversions which they never allowed before. So if you happen to have money in a pre tax TSP and you now want to convert it to a Roth TSP in plan, there you now are allowed to do so. However, you just need to know you will pay ordinary income tax on it. However, there is a caveat to this and there are many people in the armed forces that are still employed in the combat zone. And when you have somebody who's working in the combat zone, their pay is actually tax exempt. I think the right initials for that is C Z T E. Right. So combat zone tax exempt for them. They are allowed ready for this? They are allowed after their normal contributions 245 whatever it is the catch up, the whole thing. They are allowed to put in extra money up to the 415C limits of 72,000 or 80, $80,000 if they're 50 or older. It's not called a 415, but it is combat zone tax exempt. So what would happen is they would put it in to their traditional tsp and then after January 28th they could do an in plan conversion to what their after tax tsp. If in fact they just leave it in their regular pre tax tsp, their original contribution will always remain tax free when they take it out, but then the growth on that money will be taxable. So if they could just get it over to the in plan Roth TSP and also have a Roth IRA on the outside that later on in life when they're no longer in the armed forces, they could then take the money, transfer it to their Roth IRA and 100% of it would be tax free. Or if they leave it in the TSP and it's been in there for at least five years and they're 59 and a half, they will be able to take all of it then at that point out tax free.

[B]

That's great.

[A]

So they should just know that. So kt, did that help you at all?

[B]

Susie? I only have one last question and I guess I was a little bit confused because we didn't really address it. How long can you do this? I don't think it applies to me.

[A]

Now listen, if you're still working for a corporation, maybe you're a solo employer, meaning you have your own 401k, your, you know, a husband and a spouse. Spouses can do this. Everybody can do this, right? You can get a fortune if you're making a lot of money into these accounts. However, once you're no longer working, you don't have income or you're taking your required minimum distributions, which is me, right? Which is things like that. You probably wouldn't be doing this anymore.

[B]

Okay.

[A]

All right. However, the majority of people, believe it or not, that. Listen to this, even if they're in their 60s, 70s, they are still working. They have extra money. Especially if you're out there and you are 30, 40, 50, you have extra money and you can do this. I'm telling you, do it. Do it. But you have to make sure again, who you work for has a Roth 401K or 403 and they allow in plan conversions. All right, everybody. Okay, KT, take us out. Girlfriend.

[B]

There's only one thing I want you to remember besides that in plan conversion.

[A]

I thought you were going to say something else. You know how I thought you were going to say? There's only one thing I want you to remember, and it's this. Push the button to make sure that we're recording before we do an entire podcast.

[B]

On that note, everyone record. Remember this. People first, then money, then things.

[A]

Now you stay safe. Bye. Bye. We are strong we are wise we will not apologize we are here we will thrive Together we will rise we're the little bit of faith and everything it takes we are strong, we are.

[B]

Wise Together we will rise.

[A]

Hi, everybody. Suzy O here. And I have to tell all of you there is one benefit that I know all of you need and your corporations need to offer. And it comes from a company that I helped co found over 5 years ago by the name of Secure Save. So whether you're an employee or an employer, I want you to go to securesave.com Suzy S U Z E and take a look at what I have for you there. I promise you, you're gonna like it.

[C]

All right, now, neither Suze Orman Media nor Suze Orman is acting as a certified financial planner advisor, a certified financial analyst, an economist, cpa, accountant or lawyer. Neither Suze Orman Media nor Suze Orman make any recommendations as to any specific securities or investments. All content contained in this podcast is for informational and general purposes only and does not constitute financial accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any losses which may arise from accessing or reliance on information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss damages, direct or indirect, arising from the use of this information. The must have documents discussed in this podcast are legal documents created by a lawyer and distributed by Hay House. Thanks for listening.