Author Topic: IRA Question: To Open A Non-Deductible Traditional IRA?  (Read 1091 times)

beattie228

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IRA Question: To Open A Non-Deductible Traditional IRA?
« on: January 31, 2018, 11:56:51 AM »
Hello all,

Long time lurker of the forum, first time posting. I was hoping to get some advice about opening a non-deductible Traditional IRA or just continue to put money into my taxable account. My fortunate dilemma is my income is too high to qualify for any up front tax deductions on funds put into a traditional IRA and likewise am ineligible for a Roth without first doing a backdoor conversion. I currently max my 401k at $18.5k with an additional employer match of 8%.

My question is should I open a traditional IRA, throwing $5.5k a year into it for tax deferred growth or should I just continue to invest in my taxable account while continuing to max out my 401k?

newgirl

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Re: IRA Question: To Open A Non-Deductible Traditional IRA?
« Reply #1 on: January 31, 2018, 11:58:24 AM »
Following, same boat. This particular nuance of "to IRA or not to IRA" is confusing to me.

Systems101

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Re: IRA Question: To Open A Non-Deductible Traditional IRA?
« Reply #2 on: January 31, 2018, 12:10:41 PM »
My question is should I open a traditional IRA, throwing $5.5k a year into it for tax deferred growth or should I just continue to invest in my taxable account while continuing to max out my 401k?

Why would you not do a backdoor into a Roth? 

MDM

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Re: IRA Question: To Open A Non-Deductible Traditional IRA?
« Reply #3 on: January 31, 2018, 12:16:14 PM »
As in Backdoor Roth IRA - Bogleheads.  Biggest caveat is if one currently has a large pre-tax tIRA balance.

beattie228

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Re: IRA Question: To Open A Non-Deductible Traditional IRA?
« Reply #4 on: January 31, 2018, 12:19:50 PM »
My question is should I open a traditional IRA, throwing $5.5k a year into it for tax deferred growth or should I just continue to invest in my taxable account while continuing to max out my 401k?

Why would you not do a backdoor into a Roth?

I suppose that's my question in terms of my next move. Is there such thing as too much invested into retirement accounts or does the tax-sheltered gains outweigh the concern of not being able to access those funds for many years to come? Currently don't have a tIRA so no concern for me for it being too large.

MDM

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Re: IRA Question: To Open A Non-Deductible Traditional IRA?
« Reply #5 on: January 31, 2018, 12:24:13 PM »
I suppose that's my question in terms of my next move. Is there such thing as too much invested into retirement accounts or does the tax-sheltered gains outweigh the concern of not being able to access those funds for many years to come? Currently don't have a tIRA so no concern for me for it being too large.
See How to withdraw funds from your IRA and 401k without penalty before age 59.5 and Investment Order for some thoughts on those questions.

beattie228

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Re: IRA Question: To Open A Non-Deductible Traditional IRA?
« Reply #6 on: January 31, 2018, 01:38:12 PM »
That's really helpful! Appreciate the links.