Q1: I’ve been hearing about the Mega Backdoor Roth (MBR). How do I actually know if my company’s plan offers it?
A1: The answer is always hiding in your Summary Plan Description (SPD). Even if you call your brokerage, the SPD is the actual rulebook. You need to check for two specific things:
- After-tax (non-Roth) contributions
- In-plan Roth rollover OR in-service distribution
You need both of these to do an MBR. If your plan only has one or the other, MBR is almost certainly off the table.
Q2: If I work two jobs or switch employers mid-year, how do employee contribution limits work for a 401k/403b?
A2: 401k and 403b plans share the exact same IRS 402(g) limit, $24,500 in 2026 with a catchup contribution of $8,000 allowed, and a super catch up of $11,250 for ages 60-63. Technically speaking, the catch-up is not part of the 402(g), but functionally it works almost exactly the same. So even with multiple jobs, your total employee contribution cap stays the same. If you accidentally overcontribute, reach out to your HR/payroll ASAP to request an excess contribution refund. Side note: 457(b) plans are a totally separate system, so they don’t count toward the 402(g) limit.
Q3: My vested RSUs are listed on my W-2 income. Do I really have to pay taxes on them?
A3: That is correct. Think of RSU vesting like your company giving you a cash bonus on that day and immediately using it to buy company stock for you. That said, most companies automatically sell a chunk of your shares on the vest date to cover the taxes. Because of that, your actual tax hit at the end of the year might be smaller, so it’s good to double-check this in your payroll records.
Q4: CA and NJ don’t recognize HSAs for state taxes. Is it still worth doing? And if so, how should I invest it?
A4: You still get the federal tax break, which makes it worth it for most people. To minimize taxes in CA/NJ:
- Stick to investments with no dividends, or pick state/local tax-exempt bonds.
- Since capital gains are taxed by the state, use a buy-and-hold strategy. Hold on to them until you relocate to another state or until tax laws finally change.
- If you need the money for medical bills right away, keep it in cash instead of investing.
Q5: What happens to my healthcare FSA if I quit my job?
A5: If you’re planning to leave, you can actually spend your entire annual commitment before you walk out the door. Say you signed up to contribute $1,000 for the year, but quit halfway through after putting in only $500—you can still spend all $1,000, and your employer can’t ask for the money back. Theoretically, you could spend it all in January and leave. On the flip side, if you leave money behind, your employer gets to keep it.
- Note: This trick works for Health FSAs and Limited-Purpose FSAs, but not for Dependent Care FSAs (where you can only spend what you’ve actually put in so far; see IRS Ruling 201012060).
If you have any questions or need advice about how to better optimize your retirement savings and financial stability, please feel free to connect with us.