Author Topic: Switching from a traditional to a roth IRA  (Read 2372 times)

Hall11235

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Switching from a traditional to a roth IRA
« on: July 24, 2015, 07:35:03 AM »
Hi, folks!
A quick question.

I am 21, just graduated and am currently working for a small company and am aggressively saving my money and paying down my student loan debt. I make 45k. I am close to having the initial 3k saved up to open a vanguard IRA. My question:

My company does not have a 401(k) option so, in theory, if I opened a traditional IRA, my contributions to it could be written as a deduction on my taxes. Once my company has a 401k option, is it possible to switch that traditional account to a Roth IRA?

forummm

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Re: Switching from a traditional to a roth IRA
« Reply #1 on: July 24, 2015, 07:45:29 AM »
You could do a conversion from T.IRA to Roth IRA. But you don't need to. I would just leave your T.IRA sitting there with Vanguard until you retire. If you want/need to open a Roth, just go ahead and do it. You can have as many accounts as you need. I have 2 Roth accounts for example.

And I believe the income limit for T.IRA deductions is much higher than 45k. So you could keep contributing to it for awhile, unless you get a big raise and your company adds a 401k.

Hall11235

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Re: Switching from a traditional to a roth IRA
« Reply #2 on: July 24, 2015, 09:34:21 AM »
Thanks, Forummm.
Should I keep feeding you lowballers to get you the fabled "Walrus" Status? Lol.

forummm

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Re: Switching from a traditional to a roth IRA
« Reply #3 on: July 24, 2015, 10:05:51 AM »
Thanks, Forummm.
Should I keep feeding you lowballers to get you the fabled "Walrus" Status? Lol.

No need to waste your time or mine in inventing things to post about. But if you have real questions, there are many of us here happy to help. :)

TomTX

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Re: Switching from a traditional to a roth IRA
« Reply #4 on: July 25, 2015, 04:57:00 AM »
Hi, folks!
A quick question.

I am 21, just graduated and am currently working for a small company and am aggressively saving my money and paying down my student loan debt. I make 45k. I am close to having the initial 3k saved up to open a vanguard IRA. My question:

My company does not have a 401(k) option so, in theory, if I opened a traditional IRA, my contributions to it could be written as a deduction on my taxes. Once my company has a 401k option, is it possible to switch that traditional account to a Roth IRA?

Small companies have the option of offering a SIMPLE IRA. Read up on it.

When I set up one for a small company I worked for (3 employees) - it was pretty painless. Vanguard charged a whole $20 per year per participant. Employees (all 3 of us) could choose any Vanguard fund.

Hall11235

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Re: Switching from a traditional to a roth IRA
« Reply #5 on: July 27, 2015, 07:31:13 AM »
I'm trying to convince the powers that be that setting up a 401(k) for us would be awesome. But the bosses are all loaded and are having trouble seeing it from our perspective. The simple 401k seems like the best option by far.

Thanks!