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What investment vehicles can be used once you pass the income limits of a Roth IRA?
Posted on 4/11/22 at 2:47 pm
Posted on 4/11/22 at 2:47 pm
My wife and I are expecting to pass the income limits to continue contributing towards a ROTH for 2022. For years, I thought I'd just transition towards a traditional IRA once I reached the thresholds for the ROTH. When looking up the income limits today for the traditional IRA, I see that it's the same as the ROTH. So, what do people do to continue to make contributions towards some type of retirement investment account once they pass the incomes of both the traditional and ROTH IRAs? I would like to continue saving in some type of retirement investment vehicle.
This post was edited on 4/11/22 at 2:52 pm
7
Posted on 4/11/22 at 3:01 pm to Hammond Tiger Fan
quote:You can still contribute to a traditional IRA if you chose. The limits relate to the deductibility of the contribution. Alternatively, you could just contribute to a brokerage account if you do not want to contribute to a traditional IRA without the deduction.
My wife and I are expecting to pass the income limits to continue contributing towards a ROTH for 2022. For years, I thought I'd just transition towards a traditional IRA once I reached the thresholds for the ROTH. When looking up the income limits today for the traditional IRA, I see that it's the same as the ROTH. So, what do people do to continue to make contributions towards some type of retirement investment account once they pass the incomes of both the traditional and ROTH IRAs? I would like to continue saving in some type of retirement investment vehicle.
Posted on 4/11/22 at 3:09 pm to Hammond Tiger Fan
Posted on 4/11/22 at 3:19 pm to UltimaParadox
quote:
Backdoor Roth IRA
This for sure. Amazed at how many people never seem to know about it.
Taxable account
Mega backdoor Roth if your plan allows it. Not all that common.
Posted on 4/11/22 at 4:22 pm to UltimaParadox
quote:
Backdoor Roth IRA
This is where I give my advice about making damn sure you don't have ANY balances in traditional, SEP, or Simple IRAs before you go this route.
Every year I pick up a few clients who did not realize this.
Posted on 4/11/22 at 6:02 pm to LSUFanHouston
quote:
Backdoor Roth IRA
This is where I give my advice about making damn sure you don't have ANY balances in traditional, SEP, or Simple IRAs before you go this route.
Every year I pick up a few clients who did not realize this.
I did this last year and paid the tax bill on this. Anything else I need to know?
Posted on 4/11/22 at 6:36 pm to Hammond Tiger Fan
quote:
I would like to continue saving in some type of retirement investment vehicle.
Max out your HSA if you aren't already. Alot of people don't realize that it's basically a trad IRA if u withdrawal for non medical. So it won't go to waste if you don't have that many medical expenses.
Posted on 4/11/22 at 7:10 pm to Hammond Tiger Fan
We have been opting for backdoor Roth. Researching I-bonds now.
If you maxing 401k (if eligible) and executing the backdoor Roth, perhaps it’s time to consult a Financial Advisor. It’s free to talk.
If you maxing 401k (if eligible) and executing the backdoor Roth, perhaps it’s time to consult a Financial Advisor. It’s free to talk.
Posted on 4/11/22 at 8:30 pm to Hammond Tiger Fan
quote:
What investment vehicles can be used once you pass the income limits of a Roth IRA?
Backdoor Roth(if no trad ita, sep iras etc.), mega backdoor Roth(if allowed as mentioned), max 401k, if you have a side gig consider divesting profits in a solo 401k, syndications/reits/traditional real estate, regular brokerage accounts.
Posted on 4/11/22 at 8:35 pm to Hammond Tiger Fan
traditional ira and set up a brokerage account with funds etc
Posted on 4/11/22 at 9:21 pm to LSUFanHouston
So if I have a balance in a trad IRA, Is it advantageous to bite the bullet and pay the taxes to allow the backdoor?
Posted on 4/12/22 at 6:53 am to turkish
quote:
So if I have a balance in a trad IRA, Is it advantageous to bite the bullet and pay the taxes to allow the backdoor?
It depends
Posted on 4/12/22 at 7:43 am to LSUFanHouston
I have always contributed directly to my Roth IRA. Last year was the first year I had to go the Backdoor route. This year my money sat in my traditional IRA for long enough to earn $.02 interest. Is that going to screw me up next year? What's the worst that can happen? I have to pay tax on the $.02? Or is it more complicated than that?
Posted on 4/12/22 at 8:11 am to turkish
quote:
So if I have a balance in a trad IRA, Is it advantageous to bite the bullet and pay the taxes to allow the backdoor?
Think it depends on how much, time to retirement etc
Personally I don't worry about it too much. Already have an amount that I don't want to get a tax hit on. I just go traditional and let the Roth grow in it's own
Posted on 4/12/22 at 10:19 am to UltimaParadox
Be mindful of the Biden Build Back Better bill. He was targeting backdoor Roths. It has stalled out for now and may never go through, but just keep an eye on it.
Posted on 4/12/22 at 2:29 pm to Hammond Tiger Fan
457 plan if “highly compensated” at a nonprofit such as a hospital. HSA as well.
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