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Betterment adds mega-backdoor Roth to its solo 401(k) platform

Advisers using Betterment Advisor Solutions get in-platform conversions, 1099-R reporting and automated tracking of contributions against annual limits.

At a glance

  1. The feature is open to self-employed customers who use Betterment directly and to advisers who offer solo 401(k)s to clients through Betterment Advisor Solutions.
  2. Eligible participants can contribute up to $72,000 a year through employee contributions, employer matches and voluntary after-tax contributions, according to PLANADVISER's report.
  3. Betterment launched the solo 401(k) platform in April and extended it to adviser networks HUB and Osaic in August.

Betterment announced mega-backdoor Roth capabilities for its solo 401(k), letting self-employed clients start a Roth conversion inside the account and receive the related tax forms through the platform. The feature is open to self-employed customers who use Betterment directly and to advisers who offer solo 401(k)s to clients through Betterment Advisor Solutions.

Eligible participants can contribute up to $72,000 a year through employee contributions, employer matches and voluntary after-tax contributions, according to PLANADVISER's report. Advisers get automated tools that track contributions against annual limits, and contributions, conversions and 1099-R reporting all run inside the platform.

Betterment launched the solo 401(k) platform in April and extended it to adviser networks HUB and Osaic in August. Mega-backdoor Roth for its employer-sponsored 401(k) plans is planned for the coming months. The firm reports more than 1 million customers and more than $70 billion in assets.

Reported by the Tax & estate planning desk from PLANADVISER. Published . Corrections

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