Does automatic roth in-plan conversion preclude my ability to mega backdoor roth IRA conversion?

Question

In my 401k plan I have the option to make after-tax contributions (This is different than Traditional/Roth type accounts)
Ignoring all gains for simplicity, my 2020 contributions end up like this:

I contribute $6000 to my Roth IRA
Throughout the year I contribute $19500 to my Traditional 401k
Throughout the year my employer contributes $4875 to my 401k (by 25% match)
Throughout the year I contribute $32625 to my 401k using after-tax funds
I convert $32625 to my Roth IRA using backdoor Roth IRA conversion. This costs me $25 in fees.

So, I end the year 2020 having added a total of $63000 to my retirement accounts:
$24375 to my 401k ($19500 + $4875)
$38625 to my Roth IRA ($6000 + $32625)
My provider (Fidelity) provides a web-UI for performing the backdoor Roth IRA conversion. They charge me a $25 fee to do this.
They also offer automatic in-plan conversions for after-tax funds into Roth 401k with no extra fee.
If I setup automatic in-plan roth conversion for the after-tax money, will that change any eligibility for performing the backdoor roth IRA conversion in the future?
Are there reasons I might not want to use automatic in plan conversion?

Daniel · Answer

Really the only reason not to do the in-plan conversion is because 401(k)s typically have fewer investment options and sightly higher fees than IRAs. With an IRA you can invest in basically whatever you want including stocks, ETFs, and other investments while your 401(k) is pretty much limited to whatever mutual funds your employer has chosen to include in the plan.
If you're ok with that trade-off, the in-plan conversion is a good option. It's free, so you save the conversion fee. Also, they typically sweep after-tax contributions to your Roth account daily as soon as the contribution is made. This means there's no chance to accrue taxable growth in your after-tax funds before it's converted to Roth where the growth is tax-free.
Enabling the automatic in-plan conversion should have no effect on your ability to switch back to the old method later. You can always disable the automatic conversion.

Does automatic roth in-plan conversion preclude my ability to mega backdoor roth IRA conversion?

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