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What if I make too much money for a Roth IRA/Traditional IRA?
Posted on 3/16/15 at 2:24 pm
Posted on 3/16/15 at 2:24 pm
I made over $180k last year and will clear over $200k this year. I expect this to be farily stable over the next decade.
I have a half % match up to 6% on my 401k and contibute 6%. So I'm over my 401k limit already.
I don't have any IRAs currently. Obviously, I'm over the cap for a Roth IRA and I don't think I can contribut tax free to a traditional IRA either.
I have a little over $25,000 of value in my personal investment portfolio.
What is my next best retirement option?
I have a half % match up to 6% on my 401k and contibute 6%. So I'm over my 401k limit already.
I don't have any IRAs currently. Obviously, I'm over the cap for a Roth IRA and I don't think I can contribut tax free to a traditional IRA either.
I have a little over $25,000 of value in my personal investment portfolio.
What is my next best retirement option?
14
Posted on 3/16/15 at 2:30 pm to mule74
NVM - I see you work for someone else.
Stick the extra cash into some solid index funds or go buy a rental house ( if that is your cup of tea)
Stick the extra cash into some solid index funds or go buy a rental house ( if that is your cup of tea)
This post was edited on 3/16/15 at 2:31 pm
Posted on 3/16/15 at 2:34 pm to mule74
I think you may be able to do a backdoor Roth IRA
Google it, I've only heard about it from this board
Google it, I've only heard about it from this board
Posted on 3/16/15 at 2:43 pm to mule74
quote:
What is my next best retirement option?
I'll email you my bank account info....
Posted on 3/16/15 at 2:44 pm to mule74
I'd figure out how to save enough to not work after 10 years.
Posted on 3/16/15 at 2:48 pm to mule74
What is your profession??
Posted on 3/16/15 at 3:05 pm to mule74
quote:
I made over $180k last year and will clear over $200k this year. I expect this to be farily stable over the next decade.
I have a half % match up to 6% on my 401k and contibute 6%. So I'm over my 401k limit already.
Isn't the $18k limit just for your own contribution, not the combined amount? Should let you go up to 9% at least
Posted on 3/16/15 at 3:08 pm to The Easter Bunny
Ya the combined contribution limit is 52k-ish A year
This post was edited on 3/16/15 at 3:09 pm
Posted on 3/16/15 at 3:12 pm to Croacka
quote:
backdoor Roth IRA
Make a non deductible contribution to a traditional IRA, then convert to a Roth.
Posted on 3/16/15 at 3:13 pm to mule74
I am in this situition too. I do have a traditional IRA (can't deduct on taxes though due to MAGI) but also a traditional/roth 401k mix. Most of my money goes in to my brokerage account.
Posted on 3/16/15 at 3:34 pm to Teddy Ruxpin
quote:
Ya the combined contribution limit is 52k-ish A year
I guess I've misunderstood this previously. I'll go ahead and raise my own contribution to 9%.
quote:
Make a non deductible contribution to a traditional IRA, then convert to a Roth.
Thanks. I'll look into this.
quote:
What is your profession??
Wholesale commercial insurance.
This post was edited on 3/16/15 at 3:36 pm
Posted on 3/16/15 at 3:48 pm to LSUFanHouston
quote:
Make a non deductible contribution to a traditional IRA, then convert to a Roth.
This. Since you do not have any other IRAs, you can do a backdoor Roth conversion without any taxable consequences. I currently do these annually.
Posted on 3/16/15 at 4:15 pm to mule74
Fortunately, I'm in almost the exact same situation as you.
Here's my plan:
- Max out 401k to 10% of gross pay which is limited by being a "highly compensated employee" (not sure if that's a federal thing or an individual company thing). I also get a 3% match.
- Make maximum non-deductible contribution to Trad IRA and rollover to Roth IRA - $5500 / yr
- Max HSA - $3300 / yr
So if you have the ability to own an HSA, I would max it out. Maybe even before you convert to a Trad IRA. It's non-taxable including FICA which makes it really great.
My company gives the option to do a Roth 401k, but I haven't taken advantage yet. I like avoiding the taxes now, but it would theoretically make sense to convert to Roth 401k if the alternative is investing in a taxable account.
Anyone else know of any tax shelters?
Here's my plan:
- Max out 401k to 10% of gross pay which is limited by being a "highly compensated employee" (not sure if that's a federal thing or an individual company thing). I also get a 3% match.
- Make maximum non-deductible contribution to Trad IRA and rollover to Roth IRA - $5500 / yr
- Max HSA - $3300 / yr
So if you have the ability to own an HSA, I would max it out. Maybe even before you convert to a Trad IRA. It's non-taxable including FICA which makes it really great.
My company gives the option to do a Roth 401k, but I haven't taken advantage yet. I like avoiding the taxes now, but it would theoretically make sense to convert to Roth 401k if the alternative is investing in a taxable account.
Anyone else know of any tax shelters?
Posted on 3/16/15 at 5:24 pm to mule74
My employer offers the roth 401k and traditional. Then I chexk to see f I have any room in HSA or 529 before adding to brokerage. Once I feel comfort there I look for land to buy.
Posted on 3/16/15 at 5:51 pm to mule74
Change out a few grand into ones every year and go throw them at single mothers
This post was edited on 3/16/15 at 5:52 pm
Posted on 3/16/15 at 6:24 pm to TheIndulger
Posted on 3/16/15 at 6:52 pm to geauxbears08
quote:Should be more than this if it's a family plan.
- Max HSA - $3300 / yr
Posted on 3/16/15 at 7:20 pm to Htown Tiger
quote:this is key. otherwise the conversion to the Roth is taxable on a pro-rata basis.
Since you do not have any other IRAs
Posted on 3/19/15 at 11:22 pm to mule74
Save $ in an account that gives you tax free growth,competitive rate of return, liquidity, control of your money and use as leverage to invest in real estate, businesses, and other entrepreneurial ventures...
That's my advice.
That's my advice.
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