Quick questions regarding eligibility to contribute to a Roth IRA:
I am 23 and will be making approximately ~$126k for 2015. This will put my contribution limit to my Roth IRA at $1815 for 2015.
I am already planning to contribute the max to my 401k through work for 2015 ($18k). I do not have a traditional IRA.
My understanding is that I can make a nondeductible contribution to a traditional IRA up to $5500 and then roll that over to my Roth IRA with no consequence, effectively removing the income limitation on my Roth IRA. Is this true? What am I missing? Can it really be this easy to get past the income limitation?
Any guidance would be greatly appreciated! Thank you!
Roth IRA
- elgob.bogle
- Posts: 734
- Joined: Fri Feb 29, 2008 12:29 pm
Re: Roth IRA
Are you stating your income before or after your 401k contributions? This could make a big difference.
elgob
elgob
-
- Posts: 177
- Joined: Sun Apr 08, 2012 11:38 pm
Re: Roth IRA
It can be. You are talking about a "back door roth." Emerg Doc-a frequent poster here, has a great tutorial available on his blog at: http://whitecoatinvestor.com/backdoor-r ... -tutorial/
PH.
PH.
Re: Roth IRA
The $126k is before the 401k contributions. So $108k after.elgob.bogle wrote:Are you stating your income before or after your 401k contributions? This could make a big difference.
elgob
- Ever Ready
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- Joined: Sat Feb 24, 2007 2:21 pm
- Location: DC metro
Re: Roth IRA
You may find this helpful.
http://www.bogleheads.org/wiki/Backdoor_Roth_IRA
Also check out the tutorial by tfb referenced above it and the external links at the end.
http://www.bogleheads.org/wiki/Backdoor_Roth_IRA
Also check out the tutorial by tfb referenced above it and the external links at the end.