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Is there even a difference between traditional IRA and Roth?

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  • Is there even a difference between traditional IRA and Roth?

    I'm sure you've answered this somewhere here but I can't find the answer. I am a hospitalist/physician advisor in CA. Like most of you I make too much to deduct my IRA contributions from my taxes (ie my IRA is all money that's already been taxed). My understanding is there is some way that if you never deducted any contribution to it from your taxes, then you don't pay taxes at withdrawal. So how is that any different than a Roth IRA?

  • #2
    You're talking about a backdoor Roth IRA. Maybe you just haven't used the right search terms because it is discussed extensively on this site. Also see:

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    Financial planning, investment management and CPA services for medical and high-income professionals | 270-247-6087

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    • #3
      Big difference. Read up on links regarding backdoor Roth.

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      • #4
        And what do you think happens to the gains tax wise?

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        • #5


          So how is that any different than a Roth IRA?
          Click to expand...


          With a non-deductible Traditional IRA, at retirement, you will pay taxes on the portion of your withdrawal attributable to growth. So, if you contributed $100,000 in non-deductible contributions, over the course of your working years; and the account grew to $300,000. Then you would pay taxes on 66.67% of ever distribution.

          On the other hand, if you make those same contributions to a non-deductible IRA and then immediately convert it to a Roth IRA. You'll pay no taxes on the distributions.

          Backdoor Roth IRA Strategy is a powerful concept. Hope this helps!

          By the way, welcome to the forum.

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          • #6


            I’m sure you’ve answered this somewhere here but I can’t find the answer.
            Click to expand...


            also search the bogleheads wiki, theres usually an answer hiding somewhere

            https://www.bogleheads.org/wiki/Non-deductible_traditional_IRA

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