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It's like two additional clicks and is an ACH transfer as well, so unless you for some reason can only click one radial button a day it should be the exact same timeframe to access cash as a HYSA, unless you exclusively wire your funds around. With that said, there is that year holding period, but outside that yeah, it's exactly the same speed as a HYSA.
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Jun 28, 2021 14:50
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I max out my Roth IRA every year through Vanguard. My work provides a 457(b) account for retirement through Fidelity and you can contribute to it both pre-tax as well as make Roth contributions (post tax). Will the 'Roth' contributions I make towards the 457(b) take away from the $6,000 contribution limit for my Roth IRA? From what I understand the Roth contributions I make to the 457(b) function essentially the same as a Roth IRA in that I won't have to pay taxes on them when I withdraw the money.
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Jun 28, 2021 17:00
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Can you backdoor more than $6000 from trad to Roth for one tax year?
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Jun 28, 2021 17:13
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hangintree posted:Will the 'Roth' contributions I make towards the 457(b) take away from the $6,000 contribution limit for my Roth IRA? No, Roth IRAs and your 457 have different contribution limits. (Roth + Non-Roth) 457 limit is $19,500 this year. (Roth + Non-Roth) IRA limit is $6,000. *(Higher for  over 50)MJP posted:Can you backdoor more than $6000 from trad to Roth for one tax year? You can convert (step 2 of the backdoor process) any amount that you have in the trad IRA, but you can only contribute (step 1) the $6,000 per year.
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Jun 28, 2021 17:28
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hangintree posted:I max out my Roth IRA every year through Vanguard. My work provides a 457(b) account for retirement through Fidelity and you can contribute to it both pre-tax as well as make Roth contributions (post tax). Will the 'Roth' contributions I make towards the 457(b) take away from the $6,000 contribution limit for my Roth IRA? "Roth" is a tax treatment. Your IRA and 457(b) are separate types of accounts, and contributing to your 457(b) does not affect your ability to contribute to an IRA. MJP posted:Can you backdoor more than $6000 from trad to Roth for one tax year? I am not sure what you are trying to suggest the OP do but I am also pretty sure that it does not make sense. Backdoor Roth contributions are an IRA specific thing, and the OP appears to be contributing to a Roth IRA directly.
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Jun 28, 2021 17:28
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regarding backdoor roth ira: i'm in the top or second from the top taxed income... my understanding was that by the time i near retirement i'd probably be earning way less than what i am now so i should just keep the money i have in my trad IRA since the taxes will be much lower... is that understanding correct?
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Jun 28, 2021 17:34
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If you have access for a 401k or 403b in addition to your 457, I'd Roth those first before you do 457. 457s already have the benefit of not needing to wait until you are 59 to withdraw from them if you leave your job, so the benefits of doing Roth is slightly less for them.
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Jun 28, 2021 17:36
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Strong Sauce posted:regarding backdoor roth ira: i'm in the top or second from the top taxed income... my understanding was that by the time i near retirement i'd probably be earning way less than what i am now so i should just keep the money i have in my trad IRA since the taxes will be much lower... is that understanding correct? More or less. The one issue is that you don't know for sure what taxes will be like when you retire so Roth can be a tax policy hedge. It's why I'm aiming for something like 33% Roth 66% trad for my retirement accounts. Usually having too much in traditional is a good problem to have because that means you've already won.
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Jun 28, 2021 17:39
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Strong Sauce posted:regarding backdoor roth ira: i'm in the top or second from the top taxed income... my understanding was that by the time i near retirement i'd probably be earning way less than what i am now so i should just keep the money i have in my trad IRA since the taxes will be much lower... is that understanding correct? Yes, but if you also have a 401(k), you can still make backdoor Roth IRA contributions even if your income level is too high to make pre-tax Trad IRA contributions. It may be worth taking the tax hit by converting whatever Trad IRA dollars you have in there now, in order to do make full use of the backdoor Roth option in future years.
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Jun 28, 2021 17:44
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drainpipe posted:More or less. The one issue is that you don't know for sure what taxes will be like when you retire so Roth can be a tax policy hedge. It's why I'm aiming for something like 33% Roth 66% trad for my retirement accounts.
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Jun 28, 2021 17:48
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Strong Sauce posted:regarding backdoor roth ira: i'm in the top or second from the top taxed income... my understanding was that by the time i near retirement i'd probably be earning way less than what i am now so i should just keep the money i have in my trad IRA since the taxes will be much lower... is that understanding correct? Yeah. The key is that you cannot take a benefit now so the real alternative is a taxable brokerage. Roth is better than that, even at 37% marginal income rate. It's super dumb. Strong Sauce posted:yeah i actually have more in my ROTH IRA from before i was making good money to now because i didn't understand how any of this worked (still don't)... i'm planning on putting this rollover IRA i have into my trad IRA and then contributing the 6K to it. i've pretty much maxed out in terms of IRA/401K so looking to also eventually put more money into a normal investment account. thanks for the info! Roll your Rollover into your 401k. Does this get you a $0 balance in your trad ira? If yes, then slap $6k in there, and then roll it over into your roth ira. As with many things in loophole land it's important for you to click those buttons in order to benefit. It's super dumb. H110Hawk fucked around with this message at 18:11 on Jun 28, 2021 |
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Jun 28, 2021 18:07
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QQ if I sold ISO and ESPP shares this year the profit of the sale factors into my AGI for 2021 correct? If so then with my promotion I am definitely over some income limits.
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Jun 28, 2021 21:31
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cheese eats mouse posted:QQ if I sold ISO and ESPP shares this year the profit of the sale factors into my AGI for 2021 correct? Yes.
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Jun 28, 2021 22:03
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H110Hawk posted:Yeah. The key is that you cannot take a benefit now so the real alternative is a taxable brokerage. Roth is better than that, even at 37% marginal income rate. It's super dumb. oh... so i should try to do a backdoor roth? even with the tax hit now? quote:Roll your Rollover into your 401k. Does this get you a $0 balance in your trad ira? If yes, then slap $6k in there, and then roll it over into your roth ira. As with many things in loophole land it's important for you to click those buttons in order to benefit. It's super dumb. to be clear, i have roth ira trad ira rollover ira if i roll over my rollover ira, i'll still have my trad ira.. so is your suggestion to roll my rollover ira into my 401k, then roll over my entire trad ira into a backdoored roth ira?
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Jun 28, 2021 22:23
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Strong Sauce posted:to be clear, i have Gotcha. Does your 401k accept Traditional IRA roll-ins that aren't a "Rollover IRA" ? The only difference between the two is semantic for some 401k's. Basically you need $0 in Traditional+Rollover IRA balance to do this "for free." If not, you have a choice to make. I've been skipping backdoor roth ira due to significant traditional IRA balance where for some number of years I made "non-deductible traditional ira contributions." Basically I put in post-tax money into my traditional IRA. This makes it complicated to roll that IRA into a 401k, as I think either I need to discard that tax basis, or look it up and split it out and ???. If you haven't done this and your 401k accepts your Traditional IRA roll in this is super easy, dump it all into your 401k and then do the backdoor roth ira. The choice to make is if you want to pay taxes you can either convert the whole balance, or do the pro-rata calculations with your backdoor ira conversion. I wouldn't suggest this.
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Jun 28, 2021 22:41
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H110Hawk posted:I've been skipping backdoor roth ira due to significant traditional IRA balance where for some number of years I made "non-deductible traditional ira contributions." Basically I put in post-tax money into my traditional IRA. That's just step one of backdooring it to a Roth, unless I'm missing something? If you convert it to Roth I think you'd only owe taxes on the gains, not the principal. Unless you mean that you have a mix of both deductible and non-deductible contributions all mingled together, in which case yea it's a bit messy.
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Jun 29, 2021 00:09
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Guinness posted:That's just step one of backdooring it to a Roth, unless I'm missing something? If you convert it to Roth I think you'd only owe taxes on the gains, not the principal. Yeah it's a big old comingled mess. I would need to look up which years I made non-deductible contributions, add it all up, then split it out. Or just say gently caress it and pay taxes again on the probably $36k of contributions when I retire by rolling it into my 401k. Of course the IRS transcript system has fields for these values. They are always 0. 
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Jun 29, 2021 00:48
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cheese eats mouse posted:QQ if I sold ISO and ESPP shares this year the profit of the sale factors into my AGI for 2021 correct? Even better, at a certain point, new taxes materialize: https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax
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Jun 29, 2021 01:56
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H110Hawk posted:Gotcha. Does your 401k accept Traditional IRA roll-ins that aren't a "Rollover IRA" ? The only difference between the two is semantic for some 401k's. you said a lot of words that i know individually but put together.. not quite sure. okay so with that rollover ira. if i put that into the trad ira, since the rollover ira has been taxed already that will create issues with the trad ira right? everything in the trad ira right now is non-deductible. i haven't put in that rollover ira money anywhere because last time i asked and someone told me and they said i'd have to file additional forms and keep track of the money thats been taxed already. 1) what you're saying is.. if i can dump my trad ira into my 401k, i should do that, zeroing out that trad ira. then i can execute the backdoor roth ira at that moment after i have $0 in my trad ira. is that part right? 2) do i have to worry about the rollover ira i have or is that fine? should i also put that rollover ira into my roth ira then? if its already been taxed that should be okay then right?
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Jun 29, 2021 03:14
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Strong Sauce posted:okay so with that rollover ira. if i put that into the trad ira, since the rollover ira has been taxed already that will create issues with the trad ira right? Hold up. Either you or the thread is misunderstanding something. The term "rollover IRA" is usually used for a traditional 401k that has been rolled over into a traditional IRA. So it hasn't been taxed, and is essentially just another traditional IRA. The semantic difference is just because some 401ks allow you to roll any traditional IRAs into them, and some only allow you to roll rollover IRAs into them. If yours has been taxed, then it's a rollover Roth IRA, which you can just roll into your Roth IRA (edit: or leave them separate, it wouldn't matter). But I've never heard of that existing, not that I'm the most knowledgeable here. runawayturtles fucked around with this message at 06:24 on Jun 29, 2021 |
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Jun 29, 2021 06:20
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runawayturtles posted:Hold up. Either you or the thread is misunderstanding something. The term "rollover IRA" is usually used for a traditional 401k that has been rolled over into a traditional IRA. So it hasn't been taxed, and is essentially just another traditional IRA. The semantic difference is just because some 401ks allow you to roll any traditional IRAs into them, and some only allow you to roll rollover IRAs into them. honestly its probably just me not following along well enough i had a previous 401k, that, once i left the company became this rollover ira. i was reading an article that said you get taxed on it if you don't roll it over within a period of time but reading the article again it seems like that's only if they disbursed a check for your rollover ira. so i think the rollover ira i have right now hasn't been taxed. i think h110hawk's advice was to see if my 401k will let me merge in my trad ira. if it does, merge the trad ira, and rollover ira into the 401k so i'll have $0 in a trad ira.. this then will let me to execute a backdoor roth ira conversion.. i think what confused me was he discussed how it was difficult for him to do this because he had placed money that had already been taxed into his trad ira, so to put that into his 401k, he would have to calculate the amount of his trad ira that had already been taxed.. i think based on what was said... as long as i hadn't co-mingled taxed money with my trad ira, the backdoor roth ira conversion should be relatively easy (again assuming my 401k will accept the money i have in my trad ira)
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Jun 29, 2021 07:20
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Nope. What he was referring to that makes things difficult is the pro rata rule. I recommend googling that first. You need to roll untaxed TIRA money into your 401k first, if possible. In your case, it sounds like that’s your rollover IRA.
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Jun 29, 2021 07:54
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smackfu posted:Even better, at a certain point, new taxes materialize: Ohhhh I didn’t know about this one ty. Yes I have an accountant. Been waiting for my promotion to get an idea of my total income situation for the rest of the year 
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Jun 29, 2021 12:52
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KYOON GRIFFEY JR posted:"Roth" is a tax treatment. Your IRA and 457(b) are separate types of accounts, and contributing to your 457(b) does not affect your ability to contribute to an IRA. My fault, I meant "can I/can one backdoor more" but we can't do more than $6k per year to the trad, so that answers the question. If I'm backdooring, do I just create a new trad account in Vanguard, fund it, then roll it over and repeat for my wife, then repeat for both of us every year? We're already maxing our 401ks, no debts, etc.
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Jun 29, 2021 16:50
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MJP posted:My fault, I meant "can I/can one backdoor more" but we can't do more than $6k per year to the trad, so that answers the question. Yup that's it. Just make sure you don't have a large rollover IRA balance before you start doing it.
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Jun 29, 2021 17:25
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Residency Evil posted:Yup that's it. Just make sure you don't have a large rollover IRA balance before you start doing it. If I have an existing Roth IRA, that's not the same as the rollover, right? I have no trad IRA right now, it'd be a new one for the backdoor.
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Jun 29, 2021 17:45
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MJP posted:If I have an existing Roth IRA, that's not the same as the rollover, right? I have no trad IRA right now, it'd be a new one for the backdoor. Yup you should be fine.
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Jun 29, 2021 17:54
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Taking a look at my 401k contributions and I think my contributions might overshoot the $19,500 Elective Deferral limit. Unfortunately I can’t really tell how many contributions are left in the year, so IDK what to set the monthly contributions to  Is there like a calendar everyone uses, or do I have to just guess and hope I don’t go over?On the plus side, my 401k’s expense ratio is nice and low (0.05)!
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Jun 29, 2021 17:58
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My payroll just stops when I hit 19500. So it’s safe to over contribute. Not sure why you don’t know how many contributions are left in a year though. There’s 6 months left so assuming you are paid monthly you have 6 pay periods left, no?
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Jun 29, 2021 18:01
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Adhemar posted:Nope. What he was referring to that makes things difficult is the pro rata rule. I recommend googling that first. hmm i thought the first part you wrote is what i was talking about... don't mix any money into a trad ira that has non-deductible money... but also my untaxed trad ira is not my rollover ira. i have both a trad ira and i have this rollover ira that's been sitting there by itself for a while.
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Jun 29, 2021 18:03
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doingitwrong posted:My payroll just stops when I hit 19500. So it’s safe to over contribute. Not sure why you don’t know how many contributions are left in a year though. There’s 6 months left so assuming you are paid monthly you have 6 pay periods left, no? Twice-monthly pay. According to Principal, I made three contributions in April, and I don’t understand why, so that threw me off.  But if it shuts off at $19,500, perfect! Thank you for the tip!
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Jun 29, 2021 18:26
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Strong Sauce posted:hmm i thought the first part you wrote is what i was talking about... don't mix any money into a trad ira that has non-deductible money... Let's stop using the term "rollover IRA" in this discussion since it isn't relevant where the funds came from, only whether they have been taxed or not. Here's an example to explain what the other posters are talking about : You have $50,000 in a traditional IRA that you rolled over from an old job's 401k. This money is pre-tax. You also have $4,000 in another traditional IRA that you created by opening an account a few years ago. You previously claimed a deduction on that $4,000, so it is pre-tax. Finally, you have $6,000 that you recently deposited into a third traditional IRA that you are planning to convert to Roth (aka the backdoor trick). You do not plan to claim a deduction on this 6k, so this money is after-tax. As far as the IRS is concerned, when you convert that third IRA to Roth you are converting 10% of your $60,000 worth of traditional IRAs, which means you are converting $5,000 from the first IRA, $400 from the second, and $600 from the third. You must then pay taxes on the $5,400 of untaxed moneys. At the end of all this you will have 54k in traditional pretax IRAs, 6k in a Roth IRA, and owe a tax bill on $5,400 of income.
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Jun 29, 2021 18:30
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Pollyanna posted:Twice-monthly pay. According to Principal, I made three contributions in April, and I don’t understand why, so that threw me off. Make sure your employer does true up contributions to make sure you maximize your match. My old one didn't. And contributions were percentages, not fixed dollar amounts. And we didn't know how much each paycheck would be during the year.
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Jun 29, 2021 18:35
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Pollyanna posted:Twice-monthly pay. According to Principal, I made three contributions in April, and I don’t understand why, so that threw me off. Did you get an annual bonus around then? It would explain the extra contribution in April.
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Jun 29, 2021 20:49
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Pollyanna posted:Twice-monthly pay. According to Principal, I made three contributions in April, and I don’t understand why, so that threw me off. Twice monthly or every two weeks? April was a three paycheck month for me getting paid every two weeks.
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Jun 29, 2021 20:54
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Spose it’d be every two weeks. That works.
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Jun 29, 2021 20:58
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Calendars are garbage and every year should be 360 days full of twelve 30-day months thank you for coming to my Ted talk
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Jun 29, 2021 21:05
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https://en.wikipedia.org/wiki/World_Calendar Religion ruining common sense yet again.
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Jun 29, 2021 22:45
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Democratic Pirate posted:Calendars are garbage and every year should be 360 days full of twelve 30-day months thank you for coming to my Ted talk how are you obviating the need for an intercalculary period
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Jun 30, 2021 00:31
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KYOON GRIFFEY JR posted:how are you obviating the need for an intercalculary period Sun goes up sun goes down moon gets big moon gets small who needs to get more precise than that Gonna start updating my reports with “8% revenue growth over the last 12 full moons”
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Jun 30, 2021 03:52
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