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So that we don't need to worry about the tax implications of past deductibility/gains/etc., let's say that one currently does NOT have an existing traditional IRA.
Additionally, let's say you make over the ROTH MAGI phase out-range and are therefore also above the MAGI range for traditional IRA deductibility. 401K contributions have also been maxed.
From a retirement savings perspective, isn't it "obvious" that one should contribute to a traditional IRA and immediately convert to a Roth?
it is called a back door roth and as long as you do not have other tax deferred ira's it works fine. it gets very tricky if you have existing deductable ira's.
Last edited by mathjak107; 09-19-2014 at 04:34 AM..
You're not missing anything; it is a great strategy.
Remember that its not only traditional IRAs holding deductible contributions which muddy the waters. Simple and SEP IRAs, which are employer plans, count too.
If you do have existing deductible contributions, it may be worth rolling them into your current 401k plan. That is if your plan allows it, and if your plan is low cost.
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