Roth IRA

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Goal33
Posts: 2004
Joined: Sun Apr 12, 2015 12:30 pm

Roth IRA

Post by Goal33 »

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? :confused

Any guidance would be greatly appreciated! Thank you!
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elgob.bogle
Posts: 734
Joined: Fri Feb 29, 2008 12:29 pm

Re: Roth IRA

Post by elgob.bogle »

Are you stating your income before or after your 401k contributions? This could make a big difference.

elgob
pointyhead
Posts: 177
Joined: Sun Apr 08, 2012 11:38 pm

Re: Roth IRA

Post by pointyhead »

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.
Topic Author
Goal33
Posts: 2004
Joined: Sun Apr 12, 2015 12:30 pm

Re: Roth IRA

Post by Goal33 »

elgob.bogle wrote:Are you stating your income before or after your 401k contributions? This could make a big difference.

elgob
The $126k is before the 401k contributions. So $108k after.
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Ever Ready
Posts: 317
Joined: Sat Feb 24, 2007 2:21 pm
Location: DC metro

Re: Roth IRA

Post by Ever Ready »

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.
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