Current Events > It's 1/4 thru the year. Have you contributed to your Roth IRA yet? >_>

(+) Yeah! (+)

DKBananaSlamma posted...

You can put in $6500 this year and it's a good retirement investment.

Not if you make too much. Then its a reduced amount or zero.

All I got is a crappy Sammy Hagar IRA.

where do I even make a Roth Ira? fidelity account?

FelineCyborg posted...

where do I even make a Roth Ira? fidelity account?

Any of those brokerage places. Fidelity, Nationwide, Vanguard, etc.

Cuticrusader09 posted...

Not if you make too much. Then its a reduced amount or zero.

In which case you can still contribute the remainder of the $6500 to a Traditional IRA.

[LFAQs-redacted-quote]

My man!

Cuticrusader09 posted...

Not if you make too much. Then its a reduced amount or zero.

Backdoor Roth IRA.

TendoDRM posted...

In which case you can still contribute the remainder of the $6500 to a Traditional IRA.

Technically true but realistically not true for a lot of people (most people?). The IRS guideline is that if you are covered by a retirement plan at work, then there is an income limit on the amount you can deduct from your Traditional IRA contributions when you file your taxes. You can still contribute to the Traditional IRA but you can not deduct your contributions. So there's no tax-advantage to contributing to a Traditional IRA in that case. The income thresholds that you can deduct Traditional IRA contributions when covered by a retirement plan at work are actually even lower than the income thresholds for Roth IRA contributions
https://www.irs.gov/retirement-plans/ira-deduction-limits

With that being said, this is the exact mechanism through which the Backdoor Roth IRA is possible:

1. IRS allows a person who makes a lot to make a nondeductible contribution to a Traditional IRA
2. The IRS has no limitations on anyone converting a Traditional IRA to a Roth IRA (except that if they were deductible contributions before, you'll need to pay taxes now)

So you can legally contribute to a Roth IRA if you just split it up into those two steps. It's so stupid and easy and makes the Roth IRA income limit so simple to get around that it puts into question why the Roth IRA income limit still exists. But the loophole is left open and Congress and the IRS know it'd be unpopular to close it now.

It's also silly because it makes contributing to a Traditional IRA useful for only a very limited number of people. People who don't make very much should probably contribute to a Roth IRA over a Traditional IRA, because it locks in their lower tax brackets. People who make a lot can only contribute to a Roth IRA (but may need the backdoor to do it).

Fucking A. Sweet!

Balls deep

in that pussy!