Help with Roth / Non Deductible Contrib Limits

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
ChesapeakeTechie
Posts: 80
Joined: Thu Aug 02, 2007 12:06 pm

Help with Roth / Non Deductible Contrib Limits

Post by ChesapeakeTechie » Thu Dec 04, 2014 7:27 am

One of my good friends is looking to max out his retirement this year after having some fairly large expenses last year and being unable to do so. I wasn't sure how to correctly answer his question so I figured I would turn to the wisdom of everyone here. If I understand correctly, they can do the following:

-Work 401(k) - Up to $17,500 this year for him
-Roth IRAs - $5500 for both he and his wife
-Non Deductible IRA - Can they also contribute $5500 for both he and his wife in addition to the Roth IRA and then later do a backdoor conversion?

If all these were funded it looks like $17,500 + $11000 + $11000 = $39,500

Anything missing here? As a couple they do not make over $180k.

cherijoh
Posts: 6379
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: Help with Roth / Non Deductible Contrib Limits

Post by cherijoh » Thu Dec 04, 2014 7:37 am

ChesapeakeTechie wrote:One of my good friends is looking to max out his retirement this year after having some fairly large expenses last year and being unable to do so. I wasn't sure how to correctly answer his question so I figured I would turn to the wisdom of everyone here. If I understand correctly, they can do the following:

-Work 401(k) - Up to $17,500 this year for him
-Roth IRAs - $5500 for both he and his wife
-Non Deductible IRA - Can they also contribute $5500 for both he and his wife in addition to the Roth IRA and then later do a backdoor conversion?

If all these were funded it looks like $17,500 + $11000 + $11000 = $39,500

Anything missing here? As a couple they do not make over $180k.

Sorry, but each individual can only contribute up to $5500 per year. So it could be up to $5500 into a Roth OR up to $5500 into a non-deductible IRA OR a combination of the two totaling no more that $5500.

If they are 50 or over, then there are catch-up contributions with bring the IRA limits up to $6500 per individual.

Traveller
Posts: 722
Joined: Sat Jun 25, 2011 10:47 am

Re: Help with Roth / Non Deductible Contrib Limits

Post by Traveller » Thu Dec 04, 2014 7:38 am

Correct on the first two points, but the answer to the third is "No".
For 2014 and 2015, your total contributions to all of your traditional and Roth IRAs cannot be more than:
$5,500 ($6,500 if you’re age 50 or older), or
your taxable compensation for the year, if your compensation was less than this dollar limit.
From http://www.irs.gov/Retirement-Plans/Pla ... ion-Limits

NightFall
Posts: 269
Joined: Wed Mar 12, 2014 4:38 pm

Re: Help with Roth / Non Deductible Contrib Limits

Post by NightFall » Thu Dec 04, 2014 7:39 am

Can't do both a backdoor Roth and a Roth. The contribution limits are 5500 per person to a combination of Roth or traditional as I understand it. You might look at the mega backdoor Roth and see if the 401k supports it.

Post Reply