Thinking about making a backdoor Roth IRA contribution this year? These two mistakes can cost you thousands in taxes. -- LINKS -- Want to run retirement numbers for yourself? Download this spreadsheet: ► On Track for Retirement Spreadsheet Timestamps 0:00 - Don’t make these backdoor Roth mistakes 1:11 - IRA aggregation rule 4:22 - Step transaction rule 6:16 - One more mistake to avoid *** FREE GUIDE *** To learn more, visit our website: #pranawealth #patrickking #howtoretire #retirement #retirementplanning --- About Patrick King CFP® --- Patrick King is a fee-only financial advisor in Atlanta and the Founder of Prana Wealth. Over his career, Patrick has helped CEOs, all-star athletes, Grammy-winning artists, and many others build their wealth, retire sooner, and create a legacy. Patrick enjoys yoga, mountain biking, golf, travel photography, and Clemson football. Let’s connect: LinkedIn – PatrickBKing Facebook – @pranawealth Instagram – @pranawealth Twitter – @PranaWealth ---------- DISCLAIMER: Prana Wealth Management LLC (“Prana Wealth”) is a registered investment advisor offering advisory services in the State of Georgia and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this information on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Prana Wealth in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant to an applicable state exemption. All content on this site is for information purposes only. Opinions expressed herein are solely those of Prana Wealth, unless otherwise specifically cited, and are subject to change. The material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant, or legal counsel prior to implementation. Prana Wealth Management LLC receives compensation from YouTube for the presence of advertising before, after, and during this video content. Prana Wealth Management LLC does not control the content or presence of any advertisements. The presence of any advertisement does not constitute an endorsement of the ad, company, entity, or product by Prana Wealth Management LLC. ---------- CONTENT DISCLAIMER: The views and opinions expressed through this media or in comments on this channel are those of the creators and do not necessarily reflect the views and opinions held by this channel's broadcaster. Due to the social nature of this channel, these videos may contain content copyrighted by another person or entity. This channel's owner claims no copyright to said content. The broadcaster of this channel cannot be held accountable for the copyrighted content. The broadcaster shares and strives to verify information, but cannot warrant the accuracy of copyrights or completeness of the information on this channel. Any copyrighted material shared on this channel is intended to be shared by Fair Use. If you have a complaint about the use of copyrighted material, please contact the broadcaster prior to making a copyright claim. Any infringement is unintentional and will be rectified to all parties' satisfaction....(read more)
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A Backdoor Roth IRA can be an excellent option for those who want to save for retirement, but earn too much to contribute to traditional Roth IRA directly. However, as with any financial strategy, there are potential pitfalls that need to be avoided. Here are two mistakes you should certainly avoid when planning to use the Backdoor Roth IRA strategy. 1. Confirm Your Eligibility Beforehand One of the most important things to know about the Backdoor Roth IRA is that not everyone is eligible to use it. Before you begin the process, you need to confirm your eligibility. A common misconception is that anyone can use the backdoor Roth IRA, but that's not true. If you already have an existing traditional IRA, SEP IRA, or Simple IRA, you may be hit with the pro-rata rule which will complicate things. Additionally, if you earn more than a threshold income, you may not be able to contribute to a Roth IRA directly or use the backdoor method. Make sure you confirm your eligibility before contributing any money to your Backdoor Roth IRA, as any incorrect or illegitimate contributions will incur penalties and taxes. 2. Keep an Eye on Your Tax Liabilities Another important consideration when using the Backdoor Roth IRA strategy is to be mindful of tax liabilities. While the contributions themselves are not tax-deductible due to income limits, the money will grow tax-free within the Roth IRA. However, if you convert a traditional IRA to a Roth IRA using the backdoor method, the amount will be added to your taxable income, which might push you into a higher tax bracket. If you fail to manage your taxes properly, it can result in a substantial and unexpected tax liability come tax time. Make sure to consult with a financial advisor, or consult with an expert in taxes to make sure your backdoor Roth strategy won't hurt you come tax season. Final Thoughts The Backdoor Roth IRA strategy can be an effective way to save for retirement, but it requires careful planning and attention to detail. To ensure success, it's important to confirm your eligibility and pay close attention to your taxes. Working with a financial advisor can be a helpful way to plan and execute your Backdoor Roth IRA contribution, and avoid the common mistakes that can lead to financial penalties and headaches. By avoiding these two major errors, you'll have a much better chance of making the most of this powerful retirement savings tool. https://inflationprotection.org/dont-make-these-2-backdoor-roth-ira-mistakes/?feed_id=75433&_unique_id=6402157b13f3f #Inflation #Retirement #GoldIRA #Wealth #Investing #feeonlyfinancialadvisor #feeonlyfinancialplanner #financialadvisor #financialadvisorinatlanta #financialplanner #financialplannerinatlanta #FinancialPlanning #howtoretire #PatrickKing #personalfinance #PranaWealth #Retirement #retirementplanning #BackdoorRothIRA #feeonlyfinancialadvisor #feeonlyfinancialplanner #financialadvisor #financialadvisorinatlanta #financialplanner #financialplannerinatlanta #FinancialPlanning #howtoretire #PatrickKing #personalfinance #PranaWealth #Retirement #retirementplanning
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