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Roth Savings

Posted: Tue Nov 21, 2017 8:11 am
by nick2302
In reading another posting on this site I see someone saying their combined income is 400K and they save in a ROTH. My question is how can anyone earning 400K a year save in a ROTH? From what I read the rules for 2017 are

Direct Roth IRA contributions are only allowed if your income (technically your Modified Adjusted Gross Income) is below a certain level (you can get around this limit by using a Backdoor Roth IRA). For single filers in 2017, that income threshold starts at $118,000 (up from $117,000) and ends at $133,000 (up from $132,000). In that range, your contribution is limited, eventually reaching zero. For married filing jointly filers (and qualifying widower(er)s in 2017, that income threshold starts at $186,000 (up from $184,000) and ends at $196,000 (up from $194,000).

I would love to save in a ROTH but I am told I earn too much. How do others get around the rules for ROTH contributions? I earn no where near 400K more like 150K and am told I cannot save one dime in a ROTH as a single person with one earned income.

Thanks

Re: Roth Savings

Posted: Tue Nov 21, 2017 8:19 am
by user5027

Re: Roth Savings

Posted: Tue Nov 21, 2017 9:00 am
by NightFall
Some employers also allow for ROTH contributions from the employee, regardless of income level, into plans like 401k's, 403b's, or 457b's.

Re: Roth Savings

Posted: Tue Nov 21, 2017 9:16 am
by TomatoTomahto
@nick2302, yes, do the backdoor Roth for your non-employer provided savings. At your income level, I’d do Traditional for any employer-provided savings.

If you heard that Roth was unavailable to you from a CPA you employ, I’d consider getting a new one. There was a time, not that many years ago, where competent CPAs might not have heard of a backdoor Roth, but I think it should be known to them by now.