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Traditional IRA limits?
Posted on 9/15/23 at 8:15 am
Posted on 9/15/23 at 8:15 am
Is there a contribution or salary limit to Traditional IRA? I cashed out some money from my stocks and have about $20k that I would like to put into VTSAX but a google search showed that the limit is $6,500. I believe this limit is for a ROTH IRA and not just a traditional IRA. In my vanguard account, the VTSAX is currently listed under Traditional IRA which is why i'm asking about contribution limits.
Posted on 9/15/23 at 8:24 am to CHiPs25
contribution limit? YES
salary limit? NO..... however the amount you can deduct on taxes phases out the higher your income.
also depends on your 401k deductions.
LINK
salary limit? NO..... however the amount you can deduct on taxes phases out the higher your income.
also depends on your 401k deductions.
quote:
But there’s a big caveat: If you have a 401(k) or other retirement plan at work, or your spouse does, then your contribution to a traditional IRA may not be deductible.
LINK
This post was edited on 9/15/23 at 8:33 am
Posted on 9/15/23 at 8:30 am to Fat Bastard
What would be the game plan for the remaining money then? Are there other investments like VTSAX that I could put the rest of the money in?
Posted on 9/15/23 at 8:59 am to CHiPs25
The traditional and ROTH IRA limits are the same.
Posted on 9/15/23 at 9:21 am to CHiPs25
quote:What do you mean by this? VTSAX can be purchased in a taxable brokerage, Roth IRA or Traditional IRA.
In my vanguard account, the VTSAX is currently listed under Traditional IRA
What type account did you sell the stock in? I ask because when you say VTSAX is listed under traditional IRA it makes me wonder if you sold stock from IRA and just need to reinvest which wouldn't be a contribution (unless you withdrew the cash proceeds from the account already.)
Do you already have a traditional IRA or Roth IRA? Even if you're over income limit you can do backdoor Roth (unless you have traditional IRA which would trigger pro rata rule.)
This post was edited on 9/15/23 at 10:19 am
Posted on 9/15/23 at 2:46 pm to TorchtheFlyingTiger
quote:
What type account did you sell the stock in? I ask because when you say VTSAX is listed under traditional IRA it makes me wonder if you sold stock from IRA and just need to reinvest which wouldn't be a contribution
Because of the way he worded it in the OP, that’s the same question I had.
Posted on 9/18/23 at 1:09 pm to TorchtheFlyingTiger
quote:
What type account did you sell the stock in?
The money was in my stock account at E-Trade. I withdrew that money into my bank account and now want to put it into my Vanguard account.
quote:
Do you already have a traditional IRA or Roth IRA?
I currently have both in my vanguard. I have not contributed to either in many years (they were both rollover) as my income is too high (i have not done back door, fyi).
Posted on 9/19/23 at 8:26 am to CHiPs25
Yes, the $6500 contribution limit also applies to traditional IRA. There is also an income limit so may not get full or any tax deduction. (But you already knew this since you said you haven't contributed because income is too high.) Only benefit I can see over taxable is the tax differed growth and perhaps creditor protections on retirement accounts.
I still don't understand what you meant by
If your 401k allows it, you could rollover the traditional IRA into 401k and free up the backdoor Roth method without dealing w pro rata rule.
Why not just buy VTSAX in your taxable brokerage at etrade?
I still don't understand what you meant by
quote:Do you already hold some VTSAX in that account? You can buy VTSAX in any Vanguard brokerage, taxable or IRA.
VTSAX is currently listed under Traditional IRA
If your 401k allows it, you could rollover the traditional IRA into 401k and free up the backdoor Roth method without dealing w pro rata rule.
Why not just buy VTSAX in your taxable brokerage at etrade?
Posted on 9/19/23 at 9:26 am to TorchtheFlyingTiger
quote:
still don't understand what you meant by
quote:
VTSAX is currently listed under Traditional IRA
Basically I rolled over some funds from previous employer into Vanguard, and when I did that it went into the Traditional IRA. I didn't specifically do anything with intent, it's just how it panned out. This was also 8 years' ago so a little foggy on what exactly transpired.
quote:
Why not just buy VTSAX in your taxable brokerage at etrade?
I wasn't aware this was a thing. I'm not a heavy investor, I just max out my 401k and have some funds in my IRA at Vanguard.
Posted on 9/19/23 at 9:38 am to CHiPs25
You'd probably have to buy VTI (the ETF equivalent of VTSAX) or use Vanguard taxable brokerage.
Posted on 9/19/23 at 10:11 am to CHiPs25
Good on ya for asking questions and congrats on the good income. I cant comprehend how you know enough to trade individual stocks and you're familiar with backdoor IRA yet you cant sort out contribution limits or how to buy a mutual fund or ETF equivalent on your own.
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