Riverman22ParticipantStatus: ResidentPosts: 23Joined: 01/05/2018
I am starting my first job in June and am anticipating mine and my spouse’s AGI to be ~$191k for 2019. With any unforeseen changes or a bump in my production it could easily exceed the $193k income limit. I know I will be doing backdoor contributions in the future so should I just start doing it now? The reason I want to do it now is because I have the cash on hand and want the money in the market. It will also prevent me from having any urges to spend the money on other less important things.April 10, 2019 at 1:19 pm MST #205529PedsModeratorStatus: PhysicianPosts: 4695Joined: 01/08/2016
Yes backdoor. Too close.April 10, 2019 at 1:36 pm MST #205534Faithful StewardParticipantStatus: Financial Advisor, Small Business OwnerPosts: 519Joined: 06/12/2017
Agree with Peds, you’re so close that it’s safer to just do the Backdoor Roth, rather than risking having to recharacterize if you go over the income threshold.
Michael Peterson, CFP® | Faithful Steward Wealth Advisors
https://ProsperousPhysician.com | (717) 496-0900April 10, 2019 at 1:46 pm MST #205536CFEonlineParticipantStatus: PhysicianPosts: 148Joined: 09/05/2018
The only reason not to do backdoor is a few extra steps / forms, no big deal especially since you need to learn how to do them anyways for future years and WCI has a good tutorial on it.
I thought there was new law prohibiting you from recharacterizing roth to traditional. If so the downside to going roth and then realizing you significantly undercalculated MAGI is fairly large.April 11, 2019 at 2:13 am MST #205611CordMcNallyParticipantStatus: PhysicianPosts: 3059Joined: 01/03/2017
Backdoor. You’ll have to wait the extra few days for the funds to clear but will only take you an extra minute or so total.
“But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
― Benjamin Graham, The Intelligent InvestorApril 11, 2019 at 5:18 am MST #205638