Backdoor IRA
Hello, I am from CA state. I have 401k from the job. roth IRA income limits do not allow me to contribute directly to the roth IRA. Is it ok for me to open Traditional IRA, contribute after-tax money ($6000 limit) into it and transfer them to the Roth IRA. I do not have any other IRA accounts. only 401K and company RETIREMENT SAVINGS PLAN (not contribution from me into this account).
Answer:
Yes the backdoor IRA strategy will work for you. One note of caution is that there is potential this strategy will be limited if the version of the Build Back Better Act that is about to go to the Senate for a vote passes. Consider making the move soon as some of those provisions will take effect Jan of 2022.
Additionally note that there is a possibility of the side door Roth if your plan at work allows non deductible 401k Contributions. Reach out if you want to discuss further
David Huff
