IRA
I have never taken benefit of IRA so thinking of trying to take it this year. Background: - Income above 200k - Contributed 22500 to 401k - Broker - Fidelity Things I would appreciate help with: 1. How can I get benefit of IRA if I am maxing out 401k and my income is above 200k ? 2. (Note : I think this is the most feasible option for my case) How does backdoor ROTH IRA works ? Can I use it considering I am maxing out 401k ? - If I invest in traditional IRA and then convert into ROTH, is there a time limit which needs to pass before I can convert to ROTH IRA ? - What tax benefit I get from converting to ROTH IRA ? 3. How does mega backdoor ROTH work ? Does it only come into picture if you have maxed out 401j to 66k (which I have not) ? Is this relevant for me ? Do I need a tax consultant to make this work ? #personalfinance #investments
Backdoor Roth IRA You make a non deductible IRA contribution and convert it to a Roth like the next day. Id you have any funds in a traditional IRA, make sure to roll them into your 401k before the end of the year* so you can avoid the pro rata calculation. You don't need a tax professional it's pretty simple. The point is it allows you to put in more Roth money. * double check the dates.
Limited to $6,500 right?
Thank you - Do we get any tax or other benefit from doing this ?