Amazon employees – this is huge! 💥 💥 In this video we’ll explain what is new in 2022 for the Amazon Mega Backdoor Roth 401(k).

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AMAZON RESOURCES: More resources for Amazon employees on their benefits including the Amazon 401k plan, sustainable investing, and RSUs.

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Recently, there was an update to the Amazon 401(k) plan that now allows you to save an extra $20,000+ compared to what you were able to save in 2021.
The after-tax portion of your 401(k) (frequently referred to as the Mega Backdoor Roth) which used to be limited to 10% of your base salary, has been expanded to allow employees to contribute up to the federal 401(k) limit in 2022.

Video highlights:

00:55 What’s new for 2022 in Amazon’s 401(k)
01:09 Example of how an Amazon employee can save $37,300 into their Roth
01:49 How do you convert your after-tax dollars within Fidelity Net Benefits
04:13 Considerations when thinking about maxing out your Amazon 401(k) and Mega Backdoor Roth

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Avier Wealth Advisors
425-467-1011
10655 NE 4th St. Suite 508
Bellevue, WA 98004
info@avieradvisors.com
We focus on providing comprehensive financial planning and investment advisory strategies for tech professionals and their families.

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Third Party:
Avier Wealth Advisors is not affiliated with Amazon. There is no guarantee that the information we have provided is accurate. Amazon employees are encouraged to contact their employer should they have any questions regarding their employee benefits.

Taxes: Avier Wealth Advisors does not prepare taxes. The tax ideas presented are meant to demonstrate general concepts rather than precise calculations. We consult with your tax professional for exact calculations.

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If you’ve been looking for ways to save money for retirement, then the Amazon Mega Backdoor Roth 2022 might be just the thing for you.

The Amazon Mega Backdoor Roth 2022 is a process that allows you to make after-tax contributions to your 401(k) retirement account, and then convert those contributions into a Roth IRA.

Why is this important? Because contributions to Roth IRA accounts are made with after-tax dollars, which means that when you withdraw the money at retirement, you won’t have to pay any taxes on the gains.

When it comes to retirement savings, every little bit helps. And if you’re eligible to take advantage of the Amazon Mega Backdoor Roth 2022, you could save tens of thousands of dollars over the course of your lifetime.

Here’s how it works:

Step 1: Make after-tax contributions to your 401(k) account

The first step in the Amazon Mega Backdoor Roth 2022 process is to contribute as much money as you can to your 401(k) account.

Your contributions will be after-tax, which means that they won’t be deductible on your tax return. But that’s okay, because the real benefit comes later.

Step 2: Roll over your after-tax contributions to a Roth IRA

After you’ve made your after-tax contributions to your 401(k) account, you can then roll over those contributions to a Roth IRA.

This will allow you to avoid paying taxes on the gains when you withdraw the money in retirement.

That’s the beauty of the Roth IRA: It’s a tax-advantaged account that allows you to save money for retirement without having to pay taxes on the gains.

Step 3: Consider your tax bracket

Before you decide to take advantage of the Amazon Mega Backdoor Roth 2022, it’s important to consider your tax bracket.

If you’re in a high tax bracket now, and expect to be in a lower tax bracket in retirement, then it might not be worth it to make after-tax contributions to your 401(k) account.

But if you’re in a low tax bracket now, and expect to be in a higher tax bracket in retirement, then the Amazon Mega Backdoor Roth 2022 could be a great way to save money on taxes.

The Bottom Line

If you’re looking for ways to save money for retirement, then the Amazon Mega Backdoor Roth 2022 is definitely worth considering.

By making after-tax contributions to your 401(k) account, and then rolling over those contributions to a Roth IRA, you could potentially save tens of thousands of dollars over the course of your lifetime.

Just make sure to consider your tax bracket, and talk to a financial advisor to see if the Amazon Mega Backdoor Roth 2022 is right for you.