Recently took over my investments from an advisor and transferred it all to Fidelity. I'm simplifying to a 3 fund portfolio so about to sell the managed mutual funds and move then into indexed ETFs. This will trigger a taxable event in my taxable account on about $3600 of long term gains. The remaing $1600 of short term gains I'll hold until they convert to long term.
At the end of this year I'll only have contributed about half of the annual max of my work 401k through another provider and would like to try and max this account out for the year.
My idea is to move my paycheck 401k contributions up to a level for the next 3 months that will max that account for the year, then draw down some of the already taxed money from the brokerage account to fund the budget expenses that the paycheck income would have funded. In my mind it would effectively move some of the funds I need to liquidate anyways for the portfolio reorganization into my 401k for the tax benefit on future gains when I withdrawal in a lower tax bracket during retirement.
Is this possible? Is this legal? Am I missing something that makes this a horrible move?