Backdoor Roth after age 70.5

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The Wizard
Posts: 11000
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Backdoor Roth after age 70.5

Post by The Wizard » Wed Sep 13, 2017 3:05 pm

Since contributions to a traditional IRA are not permitted in the year you turn 70-1/2 and after, it seems clear that doing a Backdoor Roth is no longer feasible at that point.
It does look like I may have some part-time Earned Income this year (age 67) and next, so I'll likely put $6500 into my Roth IRA via Backdoor for each of those years.

But starting 2020, if I'm still inclined to part-time employment, that avenue is off limits to me.

I'm guessing I will just toss extra income into my taxable account if it comes to that in 2020 and beyond.

What have other age 70+ folks done in this situation (MAGI higher than Roth contribution phase-out)?
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JW-Retired
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Re: Backdoor Roth after age 70.5

Post by JW-Retired » Wed Sep 13, 2017 3:37 pm

The Wizard wrote:
Wed Sep 13, 2017 3:05 pm
Since contributions to a traditional IRA are not permitted in the year you turn 70-1/2 and after, it seems clear that doing a Backdoor Roth is no longer feasible at that point.
......................
But starting 2020, if I'm still inclined to part-time employment, that avenue is off limits to me.

I'm guessing I will just toss extra income into my taxable account if it comes to that in 2020 and beyond.

What have other age 70+ folks done in this situation (MAGI higher than Roth contribution phase-out)?
Just thought to point out that Roth conversions are still permitted at any age. So if you could do a rollover from an employer plan to load up a tIRA, you would be able to Roth convert some of that if/when your tax bracket might make it look OK to do.

But not as tax free as the backdoor, and you have to do your yearly RMD first.
JW
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ResearchMed
Posts: 5326
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Re: Backdoor Roth after age 70.5

Post by ResearchMed » Wed Sep 13, 2017 4:01 pm

The Wizard wrote:
Wed Sep 13, 2017 3:05 pm
Since contributions to a traditional IRA are not permitted in the year you turn 70-1/2 and after, it seems clear that doing a Backdoor Roth is no longer feasible at that point.
It does look like I may have some part-time Earned Income this year (age 67) and next, so I'll likely put $6500 into my Roth IRA via Backdoor for each of those years.

But starting 2020, if I'm still inclined to part-time employment, that avenue is off limits to me.

I'm guessing I will just toss extra income into my taxable account if it comes to that in 2020 and beyond.

What have other age 70+ folks done in this situation (MAGI higher than Roth contribution phase-out)?
Are you able to change the terms of your part time work to be a consultant/contract worker, so you are self employed?
I think then you would have the opportunity to continue contributing to a SEP-IRA.

RM
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The Wizard
Posts: 11000
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Backdoor Roth after age 70.5

Post by The Wizard » Wed Sep 13, 2017 4:19 pm

JW-Retired wrote:
Wed Sep 13, 2017 3:37 pm

Just thought to point out that Roth conversions are still permitted at any age. So if you could do a rollover from an employer plan to load up a tIRA, you would be able to Roth convert some of that if/when your tax bracket might make it look OK to do.

But not as tax free as the backdoor, and you have to do your yearly RMD first.
JW
Right.
I'll have to see, but my thought presently is that my last Roth CONVERSIONS will be in 2019 at age 69...
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The Wizard
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Re: Backdoor Roth after age 70.5

Post by The Wizard » Wed Sep 13, 2017 4:22 pm

ResearchMed wrote:
Wed Sep 13, 2017 4:01 pm

Are you able to change the terms of your part time work to be a consultant/contract worker, so you are self employed?
I think then you would have the opportunity to continue contributing to a SEP-IRA.

RM
I don't think so, no.
Per diem W-2 income is pretty much it...
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