Timeline for I am failing to see the purpose of a Traditional IRA for someone who already has access to a 401(k)
Current License: CC BY-SA 3.0
28 events
| when toggle format | what | by | license | comment | |
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| Oct 19, 2017 at 0:31 | answer | added | cornbread | timeline score: 1 | |
| Oct 17, 2017 at 3:54 | vote | accept | NeedAdvice | ||
| Oct 11, 2017 at 23:16 | review | Suggested edits | |||
| Oct 12, 2017 at 10:42 | |||||
| Oct 11, 2017 at 3:45 | comment | added | farnsy | @NeedAdvice If your question is in the context of someone who cannot deduct traditional IRA contributions, then we are talking about a backdoor Roth situation and you should describe it as such. In that case #3 is not true. The tax benefits when compared with a brokerage account should be fairly obvious. You don't have to pay tax on the dividends or capital gains if you use it for retirement or other qualified expenses (like a first home or education). | |
| Oct 11, 2017 at 1:46 | comment | added | NeedAdvice | @farnsy I am afraid, I will have to disagree with you. I've added documentation links from IRS. You will see that I am right. I don't think 72k a year qualifies as a very high earner. | |
| Oct 11, 2017 at 1:45 | answer | added | Harper - Reinstate Monica | timeline score: 1 | |
| Oct 11, 2017 at 1:44 | history | edited | NeedAdvice | CC BY-SA 3.0 |
provided documentation.
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| Oct 11, 2017 at 1:43 | comment | added | NeedAdvice | @David and others... #1 is absolutely true. Per rules defined on the IRS site, if you are covered by a retirement plan and make more than 72k, you cannot deduct your contributions, e.g. they are taxed. If you are NOT covered by a retirement plan at work, then you can deduct contributions. | |
| Oct 10, 2017 at 5:41 | comment | added | farnsy | True. But I don't think a backdoor Roth qualifies as a "Traditional IRA" for the purposes of this question. That's my reading, anyway. #2 holds only if the money is in a Roth at the time it is withdrawn. | |
| Oct 10, 2017 at 5:25 | comment | added | Ben Voigt | @farnsy: There can be post-tax money in a traditional IRA (#1) and when that happens, the earnings are taxed at withdrawal (#3) but the contributions aren't (#2). "backdoor" Roth contributions relied on this\ | |
| Oct 9, 2017 at 23:48 | comment | added | farnsy | Your understanding of how IRAs work is completely wrong. Unless you are a very high earner, #1 is incorrect. #2 is always incorrect. | |
| Oct 9, 2017 at 23:19 | comment | added | Wes Sayeed | #1 is incorrect. You get a refund on the taxes paid on IRA contributions. But you have to file for them on your taxes because they are self-directed (as opposed to an employer 401(k) which is already pre-tax, so you get no refund on that). | |
| Oct 9, 2017 at 20:57 | answer | added | Beanluc | timeline score: 2 | |
| S Oct 9, 2017 at 20:04 | history | suggested | stannius | CC BY-SA 3.0 |
Clarify title
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| Oct 9, 2017 at 19:35 | answer | added | louis nardozi | timeline score: -2 | |
| Oct 9, 2017 at 18:30 | answer | added | EJoshuaS - Stand with Ukraine | timeline score: 1 | |
| Oct 9, 2017 at 18:27 | review | Suggested edits | |||
| S Oct 9, 2017 at 20:04 | |||||
| Oct 9, 2017 at 17:18 | comment | added | David | To my knowledge, #1 is incorrect. Contributions to a Roth IRA are taxed. Contributions to a Traditional IRA are not taxed, regardless of 401K use, presuming that you're under the income limits. | |
| Oct 9, 2017 at 15:24 | answer | added | PGnome | timeline score: 9 | |
| Oct 9, 2017 at 14:40 | history | tweeted | twitter.com/StackFinance/status/917399379866214401 | ||
| Oct 9, 2017 at 7:11 | history | edited | Dheer |
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| Oct 9, 2017 at 6:47 | answer | added | RonJohn | timeline score: 7 | |
| Oct 9, 2017 at 6:29 | answer | added | user102008 | timeline score: 6 | |
| Oct 9, 2017 at 1:42 | answer | added | Brythan | timeline score: 5 | |
| Oct 9, 2017 at 1:37 | answer | added | JTP - Apologise to Monica♦ | timeline score: 7 | |
| Oct 9, 2017 at 1:04 | history | edited | NeedAdvice | CC BY-SA 3.0 |
added 16 characters in body
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| Oct 9, 2017 at 0:57 | answer | added | CQM | timeline score: 21 | |
| Oct 9, 2017 at 0:46 | history | asked | NeedAdvice | CC BY-SA 3.0 |