You should know that a “backdoor Roth IRA” is not an actual account you open. To complete a backdoor conversion though, you will needbotha traditional IRA and a Roth IRA. It would be wise to open these at the same place, and to have your custodian or account manager help you with ...
Let me share why I never contributed to a Roth IRA but why you probably should. I fully admit that I was once an ardentopponent of the Roth IRAin the past. But as a middle-aged father of two young children, I've come around. Contributing to a Roth IRA is a great way to diversify...
Consider a Roth Conversion If you’ve been putting all or most of your retirement savings into a tax-deferred traditional IRA or 401(k), converting all or a portion of those funds to a Roth IRA could help lower your future tax bills, Kearns shared. While you’ll have to pay taxes on ...
Enter the backdoor Roth IRA contribution. It enables you to effectively contribute to a Roth IRA even if you’re over the income threshold. To summarize how to do it, you: Contribute to your traditional IRA. Don’t take a tax deduction on it. ...
A minimum of five years has passed since your initial Roth IRA contribution or conversion. You are 59½ or older. Explore different investment strategies You might want to look into putting some of your income toward investments. With a buy-and-hold strategy, you can enjoy deferred capital ...
What started out as a fun little project has turned into a real income that covers all my expenses and gives me a ~70% savings rate. The only problem now is all my careful planning for Roth conversion ladders, maxing out ACA subsidies, etc. has gone out the window. I’m back to tax...
Solo 401(k) plans allow you to do a backdoor Roth without encountering issues with the pro rata rule. Making tax-deferred contributions to a SEP IRA, on the other hand, essentially makes one ineligible for a tax-free backdoor Roth conversion. To complete a tax-free backdoor Roth contribut...
I have a question about rolling over a Roth 401k. Sixty percent of my 401k is in Roth, post-tax money, and I also have an IRA with pre-tax money. When I retire in four years, I plan to do a Roth conversion ladder to get as much of my pre-tax money into post-tax money. I ...
Whether aconversion to a Roth IRAis good for youdepends on your financial profile. In general, if you meet the income restrictions and can afford to pay the taxes that would be due on the conversion—and your tax bracket during retirement will be higher than your tax bracket now—it makes...
Conversion Therapy: Since a tax cut seems likely this year, IRA owners should be prepared to convert or unconvert their Roth IRAs.Lange, James