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And could I just start a side-gig and add a Simple IRA for the self-employed to my Roth, thereby increasing my yearly tax-sheltered savings to $19K or thereabout??
They should limit the amount you can have in a ROTH as it was specifically intended for wage earners in middle and lower classes. If one puts the max amount in from age 18 to 65 into a ROTH and uses an index fund, it would grow to around $4 million assuming about 9-10 % annual returns. So I would cap it at about $4 mill.
Of course, it's not your fault if it grows over that. So it should be fine to have more than that in the account, but only $4 - $5 million of that should be able to go untaxed.
I don’t agree. You paid taxes already on the contribution which is exactly why you put money, after taxes or less money, into Roth vs traditional. So say I got $100 to contribute to either but in Roth I will only have $80 (assuming 20% tax). So my principal is less, trade off between tax now or later. Now if my investments grow a lot then Roth probably makes more sense. Now, you say well your investments grew too much so let me tax some of that….I understand but I don’t get it. Just my opinion.
They should limit the amount you can have in a ROTH as it was specifically intended for wage earners in middle and lower classes.
They limit annual contributions if not exclude them entirely. If you were a lower earner and built your Roth up significantly and then happen to either become a high earner or extremely wealthy should your Roth be limited/confiscated?
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If one puts the max amount in from age 18 to 65 into a ROTH and uses an index fund, it would grow to around $4 million assuming about 9-10 % annual returns. So I would cap it at about $4 mill.
And what if their returns were greater than your projections? Should they forfeit it? What if, like me people are excluded from contributing directly to a Roth but back door and utilize after tax non Roth and get 30-40k a year into your Roth? Should I forfeit money simply because I aggressively saved?
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Of course, it's not your fault if it grows over that. So it should be fine to have more than that in the account, but only $4 - $5 million of that should be able to go untaxed.
This is either lack of understanding how our tax system works or lack of care of the impact of those better off than you are
For me, this falls under the "don't hate the player, hate the game." But I like to look at it more like "respect the player, learn & respect the game" because what's been done here is legal. And IMHO, brilliant!
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