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Old 01-31-2017, 08:16 AM
 
82 posts, read 68,066 times
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For those of you with Roths IRAs, did you open them during your earning years? Or are they primarily converted from traditional IRAs?

I ask because while under the max earning threshold, I couldn't afford to fund the additional IRA, instead concentrated on efforts to max out contributions to company 401k. (I could be wrong but I don't believe my company offered a Roth option during this time).

Now that it's more of a possibility, I find I/we are over the earnings threshold for the Roth.

Did I miss a strategy that I should have used? Should I continue to fund a tradional IRA outside of the 401k?
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Old 01-31-2017, 08:27 AM
 
210 posts, read 150,873 times
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The sooner you fund a Roth, the longer the tax free growth grows.
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Old 01-31-2017, 08:33 AM
 
Location: Omaha, Nebraska
7,316 posts, read 4,157,689 times
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Quote:
Originally Posted by joni78 View Post
Now that it's more of a possibility, I find I/we are over the earnings threshold for the Roth.

Did I miss a strategy that I should have used?
If you've only been funding a 401k and have no current holdings in a traditional IRA, you can still contribute to a Roth IRA even though your income exceeds the limits. Behold the glories of the Backdoor Roth IRA! https://thefinancebuff.com/the-backd...te-how-to.html
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Old 01-31-2017, 09:26 AM
 
Location: Florida
4,361 posts, read 3,698,498 times
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Quote:
Originally Posted by joni78 View Post
For those of you with Roths IRAs, did you open them during your earning years? Or are they primarily converted from traditional IRAs?

I ask because while under the max earning threshold, I couldn't afford to fund the additional IRA, instead concentrated on efforts to max out contributions to company 401k. (I could be wrong but I don't believe my company offered a Roth option during this time).

Now that it's more of a possibility, I find I/we are over the earnings threshold for the Roth.

Did I miss a strategy that I should have used? Should I continue to fund a tradional IRA outside of the 401k?
You probably did not miss the 401k ROTH option I think it has only been around for a few years and your plan would have to be amended to include it.

For lower tax bracket individuals I would take full advantage of your co's match and then consider a ROTH. In effect you will have some taxable income in retirement (401k) and some non taxable (ROTH).

I think a lot of people jump on the tax deductible plan and miss the benefits of the ROTH.
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Old 01-31-2017, 10:03 AM
 
Location: SoCal
13,225 posts, read 6,326,744 times
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I've been contributing to non-deductible IRA and then converted immediately to Roth. But it's not a large amount because I remember in 2003, it's only $3000 per person. So it's like $6000 per couple at most. It went up to $4000 in 2004. And now $6500 per person, if you are over 50.
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