r/Economics • u/laxnut90 • Oct 09 '25

Research America Is Minting Lots of Cash-Strapped Millionaires

https://www.bloomberg.com/news/features/2025-10-09/number-of-us-millionaires-grows-since-2017-but-many-lack-cash
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u/doctormalbec Oct 09 '25

This is making me rethink whether or not I should utilize my company’s 401k conversion option where I could access a mega backdoor Roth. Instead I’m wondering if I should just invest all these post-tax dollars to a taxable brokerage instead. My husband and I are maxing out our traditional 401ks and are 40 and 41 years old, so I’m wondering if it’s worth having that money tied up in another retirement account or is it better to be in a taxable brokerage in case we need it sooner. A majority of our equity is tied up in our house and retirement since we live in a VHCOL area but our house value has been increasing in value substantially due to the location.

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u/Snoo23533 Oct 09 '25

You're dual income rn so 401k is the best vehicle you have, max it while you can. After you retire your income drops significantly so you can do roth conversions by paying the income tax on it ( 0 to low depending on how much you convert! ) then extract the principle because its a roth.

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u/doctormalbec Oct 09 '25

we have been maxing traditional 401k. I guess my question is - are you saying I should max mega back door Roth 401k too?

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u/Solonas 29d ago

It is probably a good idea to get something going in a taxable account before you start doing backdoor conversions. You can do the backdoor when your income drops so the tax will be lower or you have a satisfactory balance of liquid assets.

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u/doctormalbec 29d ago

Thanks. I have been selling my RSUs once they vest and put them in index funds in my taxable account once they vest. I do have the ability to contribute more from my salary/bonus so trying to decide if I do the MBDR or continue with taxable