How Much Is Liquidity Worth?

Here’s my first world problem of the day:

My company offers post-tax 401k contributions. I have never contributed to my 401k post-tax, thereby paving the path toward a Mega Backdoor Roth, because my employer hasn’t allowed for rollovers from my 401k. Which means I’d either have to not invest those contributions for a long time or instead deal with super annoying tax stuff on the post-tax gains being rolled over from a Traditional to Roth account that I didn’t want to bother with.

But then I realized: I’m leaving in less than two months.

Which makes Mega Backdoor Roth contributions a lot more approachable and a lot less rife with confusion.

The catch, though?: I’m leaving in less than two months. Which means I might not have a salary until who knows when. Which further means liquidity is at a premium. Which means maybe I should favor getting my salary in cash to sit on like a greedy dragon rather than stuff it into my retirement fund for favorable tax treatment.

That said, fiance did just finalize his job offer, so we’re probably in decent shape for a while? We can’t live just off his salary, but a back of the scratch pad calculation indicates his pay plus our emergency fund will last for about three years assuming we more or less follow our joint budget plus personal allowance plan. My last few paychecks would add another six months or so to that runway. That’s assuming I don’t make one red cent (but also that we don’t face any truly expensive emergencies). I can’t imagine being unemployed for that long given how strong the job market is right now, particularly for tech.

On the other, other hand, if I take the cash now, then fiance can contribute correspondingly more money into his pre-tax 403(b) when he starts his new job. Which brings us to the old “take the tax break now or later” debate.

I think I might take the middle-of-the-road path and dump half my pay into Mega Backdoor Roth and the other half keep in cash. If by Q3 I have decent job prospects, we’ll up fiance’s 403(b) contributions so we can utilize both our pre- and post- tax investment space.

Anyway I’m interested in hearing some opinions on the matter:

How much do you value liquidity? Would you go for the Mega Backdoor Roth contributions, pre-tax 403(b) contributions, or stockpile some cold hard cash?