Timeline for What year AGI applies to Roth IRA contribution limits?
Current License: CC BY-SA 4.0
8 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Jan 12, 2022 at 2:47 | comment | added | dave_thompson_085 | s/20223/2023/;; | |
| Jan 11, 2022 at 17:42 | comment | added | stannius | Keep in mind that a Roth IRA is an account, not an investment. Just because you can't safely put the money in the account doesn't mean you have to lose a year in the market. | |
| Jan 11, 2022 at 17:41 | comment | added | stannius | @pixelearth invest the $5k in a regular, taxable brokerage account (or pay down debt or add to your e-fund or "invest" in bulk discount purchases or do any of the many other things that will let your money make/save more money). In early 2023, use the money you would have put into your IRA for 2023 to instead retroactively contribute for 2022. In 2024, contribute for 2023. Ad infinitum. | |
| Jan 10, 2022 at 18:31 | comment | added | R. Hamilton | A second notable thing about backdoor conversion is that if you go that route, you cannot access those funds penalty-free for 5 years. In a direct Roth contribution, one can always pull that contribution back out (but none of any earnings it may have made) penalty free, because the income taxes have already been paid on it. But if the money flows into Trad IRA and then converted into Roth, it has to be seasoned in the Roth for 5 years before it can be withdrawn penalty free, or you have to be old enough to access all the account's money penalty free. | |
| Jan 10, 2022 at 18:27 | comment | added | R. Hamilton | @pixelearth I was going to suggest the backdoor route of putting money into a Trad IRA, NOT deducting that contribution when it comes time to file your 2022 taxes, and asking your institution to perform a conversion from Trad to Roth IRA. It will avoid these (current*) questions about MAGI and the like. Now, the *. Congress is debating versions of the BBB bill that removes this backdoor plan. It is possible that they pass and make this move illegal to do in 2022, even if you have already done so, forcing you to unwind it all. What I am personally doing is as suggested, waiting until 2023. | |
| Jan 10, 2022 at 17:31 | vote | accept | pixelearth | ||
| Jan 10, 2022 at 17:03 | comment | added | pixelearth | Right, I knew waiting was an option. But that loses a year in the market. Are there any other options that might optimize this better? It appears that I can also do a "backdoor" contribution. Would that be better than waiting? | |
| Jan 10, 2022 at 15:22 | history | answered | mhoran_psprep | CC BY-SA 4.0 |