High Income and IRA

[tonyh3]

I had a financial advisor tell me what it would still make sense to invest in a traditional IRA even if you do not qualify for the tax benefit. This doesn't seem correct, I have no intention of using him but wanted to check here to see if maybe I am missing something. He claimed the growth would be tax deferred but growth is always deferred until you sell the security regardless of what the investment is held within, correct? Not referring to dividends here.

[shuffler]

Maybe he was leading you to a backdoor-Roth?

Make non-deductible contributions to the tIRA, and then roll them over into a Roth IRA.  Then you're tax-free.
(This is more easily done when you don't have any existing tIRA funds.)

[tonyh3]

he made no mention of the backdoor Roth which seems to be the only reason that strategy would make any sense. Apart from the backdoor Roth though, any advantage?

[inline five]

No taxes on capital gains if you sell.

I have a $300k capital gain from last year in a brokerage, I'm going to lose almost 25% when I sell to move to another investment.

As long as you don't have any other IRA funds, convert it to a Roth. Makes no sense not to. If you do have IRA balances, see if you can roll them in to your current employer plan. Then you can convert the IRA contribution to the Roth IRA and just pay taxes on any (minimal) gains.

[Money Badger]

Agree with inline five...    Assuming your tax return income exceeds direct Roth contribution limits?   Age bracket also determines whether you can stash "catch up" amounts.   And is there an older spouse that qualifies you can use to jump start those higher levels perhaps?