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Congress Blesses Roth IRAs For Everyone, Even The Well Paid

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  • Avatar notadoc 
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    The new tax law makes Roth IRAs officially available to even more people. That’s because Congress put its stamp of approval on a backdoor approach that allows folks who earn too much to contribute directly to a Roth IRA to fund one anyway.

    https://www.forbes.com/sites/ashleaebeling/2018/01/22/congress-blesses-roth-iras-for-everyone-even-the-well-paid/#4104c30d7471

     

    #98472 Reply
    Liked by Craigy, Donnie, childay
    Rogue Dad, M.D. Rogue Dad, M.D. 
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    https://www.forbes.com/sites/ashleaebeling/2018/01/22/congress-blesses-roth-iras-for-everyone-even-the-well-paid/amp/

    From Forbes. Some Congressional committee officially said it was ok.

    “The Congressional blessing came in four footnotes in the Conference committee report: 268, 269, 276 and 277.

    The tax law eliminates the ability to “recharacterize” or redo a Roth conversion. In practice, that affects taxpayers with large traditional IRAs who are converting, not those doing serial, smaller backdoor Roth conversions.”

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #98551 Reply
    Avatar FIREshrink 
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    It’s officially official.

    #98565 Reply
    The White Coat Investor The White Coat Investor 
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    Topics merged into one thread.

     

    I told you so. 18 of these I’ve done now. I considered it official when it was announced in 2008 or so.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #98604 Reply
    Avatar LizOB 
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    I’ll have to show my husband this. He was doubting me that it’s legal.

    #98627 Reply
    Kon Litovsky Kon Litovsky 
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    Now, the next big thing would be to actually allow in-plan Roth conversion of after-tax contributions.  This will make the Mega Backdoor Roth strategy complete all around.

    Kon Litovsky, Principal, Litovsky Asset Management | [email protected]
    -401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

    #98631 Reply
    WallStreetPhysician WallStreetPhysician 
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    Were Roth conversions permitted beginning in 2010 or 2008? Asking because I’m running a post on this footnote tomorrow and want my dates right.

    https://en.m.wikipedia.org/wiki/Tax_Increase_Prevention_and_Reconciliation_Act_of_2005

    https://www.journalofaccountancy.com/issues/2010/jan/20091743.html

    -WSP

    Former Wall Street trader, current physician and blogger @ http://www.wallstreetphysician.com
    "As Gordon Gekko might say, 'Fees never sleep'" - Warren Buffett

    #98635 Reply
    Avatar spiritrider 
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    I told you so. 18 of these I’ve done now. I considered it official when it was announced in 2008 or so.

    Click to expand…

    I agree there never was any reason to consider other wise.

    Mostly all of the FUD can be traced to the “Chicken Little” screechings of a well known, but unceremoniously not mentioned financial planner. In case you were wondering. Thankfully, he is not one of our excellent financial professional forum members or WCI advertisers.

    #98656 Reply
    Avatar InfoRPh 
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    The first year you could actually do a backdoor Roth was in 2010.  I remember it well…(or at least remember the next year when I was trying to figure out how to correctly report it on my taxes)

    #98662 Reply
    The White Coat Investor The White Coat Investor 
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    Were Roth conversions permitted beginning in 2010 or 2008? Asking because I’m running a post on this footnote tomorrow and want my dates right.

    https://en.m.wikipedia.org/wiki/Tax_Increase_Prevention_and_Reconciliation_Act_of_2005

    https://www.journalofaccountancy.com/issues/2010/jan/20091743.html

    -WSP

    Click to expand…

    2010 was the first year you could do the conversion step as a high earner. But you could see it coming and do contribution steps for at least 2-3 years before. Here’s a good example published in 2009: http://www.raymondjames.com/branches/c2c/3dz/compass_point/pdfs/091012_forefield6.pdf

    I didn’t pay much attention because I could do direct Roth IRA contributions up until 2010-2011 thanks to that awesomely low income the military was paying me.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #98675 Reply
    The White Coat Investor The White Coat Investor 
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    I told you so. 18 of these I’ve done now. I considered it official when it was announced in 2008 or so.

    Click to expand…

    I agree there never was any reason to consider other wise.

    Mostly all of the FUD can be traced to the “Chicken Little” screechings of a well known, but unceremoniously not mentioned financial planner. In case you were wondering. Thankfully, he is not one of our excellent financial professional forum members or WCI advertisers.

    Click to expand…

    Don’t give Kitces a bad time. Overly cautious, yes, intentionally misleading, no. But I am enjoying my victory lap.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #98676 Reply
    Liked by pulmdoc, Seabass, Hank
    Craigy Craigy 
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    Once companies like Vanguard started doing how-tos it was pretty tough to argue against it.

    LEVEL 1 WCI FORUM MEMBER.

    #98705 Reply
    Liked by Seabass
    Avatar FIREshrink 
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    May 2006 is when it was first “discovered”.

    #98849 Reply
    Avatar FIREshrink 
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    I posted at Bogleheads when they made it unofficially official.

    https://www.bogleheads.org/forum/viewtopic.php?t=94372

    #98853 Reply
    Avatar FIREshrink 
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    Here is the original WSJ article which was the ‘first’ major publication article I saw that discussed the new backdoor opportunity. This byline says the article was updated May 2007 but the original article was published April or May 2006.

     

    https://www.wsj.com/articles/SB117511735138452332

    #98879 Reply

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