Back-Door Roth IRA: Definition and Explained

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A Back-Door Roth IRA is a tax-advantaged investment account that allows individuals to contribute funds to a Roth IRA, even if their income exceeds the limits set by the IRS. This type of account offers several benefits, including tax-free growth and tax-free withdrawals during retirement. To understand how a Back-Door Roth IRA works, it's important to first understand traditional Roth IRAs. A Roth IRA is a retirement account that allows individuals to contribute funds on an after-tax basis. The account grows tax-free, and withdrawals made during retirement are also tax-free. However, there are income limits for contributing to a Roth IRA. For 2021, individuals with a modified adjusted gross income (MAGI) of up to $140,000 can contribute up to the maximum annual limit of $6,000 to a Roth IRA. For those with a MAGI between $140,000 and $155,000, the contribution limit is gradually reduced. Individuals with a MAGI above $155,000 are not eligible to contribute to a Roth IRA. This is where a Back-Door Roth IRA comes in. Essentially, a Back-Door Roth IRA is a way for individuals with higher incomes to contribute to a Roth IRA by utilizing a two-step process. Step one involves making a nondeductible contribution to a traditional IRA. This contribution is not tax-deductible, as it would be with a traditional IRA. Individuals can contribute up to the maximum annual limit of $6,000 to a traditional IRA for 2021, regardless of their income. Step two involves converting the traditional IRA to a Roth IRA. This conversion can be done at any time, but it's important to note that individuals will owe taxes on any earnings that have accrued in the traditional IRA. This is because the conversion is considered a taxable event. Overall, a Back-Door Roth IRA can be a useful tool for individuals who want to contribute to a Roth IRA but have income limits. However, it's important to consult with a financial advisor or tax professional to ensure that this strategy is appropriate and aligned with individual financial goals. https://inflationprotection.org/back-door-roth-ira-definition-and-explained/?feed_id=91946&_unique_id=644a794ed5b94 #Inflation #Retirement #GoldIRA #Wealth #Investing #KeatingAssociates #RaymondJames #Retirement #savings #TheConverseTeam #BackdoorRothIRA #KeatingAssociates #RaymondJames #Retirement #savings #TheConverseTeam

"Is Birch Gold Group a Reliable Choice for Your 2023 Gold IRA Investments?" - A Quick Review #shorts

In this Birch Gold Group review video, I go over what makes this Gold IRA company unique, the pros and cons, their fees, minimums, and much more. Get their free guide here: 👉 FREE Resources: ➜ Gold IRA Company Reviews: Birch Gold Group boasts high ratings from consumer advocate groups. With an A-plus rating from the Better Business Bureau, a triple-A rating from the Business Consumer Alliance, and high marks from Trust Link, Trustpilot, and Google Business, Birch Gold is a top choice to trust your hard-earned retirement savings. Birch Gold Group’s low initial investment minimum is another edge it has over its competitors whose minimums can range from $25,000 to $50,000. A beginning $10,000 minimum investment is all that is required to start a GOLD IRA with Birch which is advantageous for first-time investors. Spanning nearly two decades, Birch Gold Group’s mission and philosophy focus on a commitment to understanding your needs and finding the right fit for you. Their

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Business News by Timothy Sumer - The company’s first quarter results showed total paid subscriptions reaching 4.5 million. Online ad revenue rose 19 percent, to $55 million, thanks, in part, to “The Daily” podcast. from NYT > Business https://nyti.ms/304QC2w via Timothy Sumer

Should I Rollover My 401k to an IRA? YES! #shorts #retirement #financialfreedom

Should I Rollover My 401k to an IRA? YES! #shorts #retirement #financialfreedom Should I Rollover My 401k to anIRA 🤔 || 401k to IRA Rollover Pro's & Con's In this video, I want to talk about rolling over your 401k to an IRA Rollover and if that makes sense for your retirement planning . I want to look at the pro's to rolling over a 401k and also the con's to rolling over a 401k. When you should rollover your 401k to an IRA and when you should NOT rollover your 401k to an IRA. Let's talk about when you should NOT rollover your 401k to an IRA: 1. You are still working and are under the age of 59.5 2. You are 55 and considering retirement (Rule 55) 3. Increased creditor protection in a 401k 4. 401k's offer loans--IRA's do not offer loans Why you SHOULD rollover your 401k to an IRA 1. More investment choices in IRA over 401k 2. Lower investment fees 3. Convert IRA to Roth IRA (Roth IRA Conversion) 4. Consolidation from multiple 401k'

Timothy Sumer

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