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The difference between a Rich person and a Poor person is how they use their time. Your Future is created by what you do Today and not Tomorrow
So I am confused. Are they eliminating Roth conversions from pretax accounts (401k, traditional IRA) for couples earning under $450k/yr ???
What is the name of the software program you use to run your John/Jane Doe simulations? Is that available online somewhere? Thanks, like your straight forward approach.
Never understood why they allowed them in the first place. They didn’t bring in the taxes like a pretax to Roth conversion did (those are money makers for the government)
My wife is older than me and has not worked and has always been my dependent. Can she receive spousal benefit even before I retire?
I wonder if while they are killing backdoor Roth they are doing anything about the ridiculously low 10k limit for those filing MFS! Probably not. There goes a chunk of my strategy.
No amount of Taxing will ever solve Government spending & debit. The only way this can end is when there no more income left to tax. Democrat party is Insane
For individuals who have higher incomes (>500k/yr) Roth’s didn’t make much sense anyways, so not as much of a big deal for them true?
This video would have been much better without Becky.
I just made some stew with it with a slice of bread.Just got my cow meat and have plenty of other foods and water sources. Im going on a bike ride now and enjoying life, hell with the $$$$$$$
The following is an excerpt from the ways and means summary:
“Sec. 138311. Tax Treatment of Rollovers to Roth IRAs and Accounts.
…
In order to close these so-called “back-door” Roth IRA strategies, the bill eliminates Roth
conversions for both IRAs and employer-sponsored plans for single taxpayers (or taxpayers
married filing separately) with taxable income over $400,000, married taxpayers filing jointly
with taxable income over $450,000, and heads of households with taxable income over $425,000
(all indexed for inflation). This provision applies to distributions, transfers, and contributions
made in taxable years beginning after December 31, 2031.”
My interpretation of the above is “non-backdoor” conversions are allowed if your taxable income is less than 400K for single 450K for married and 425K for head of households. So, conversions of existing IRAs is allowed if under those limits for the next ten years.
The older I get, the more I realize how truly corrupt and evil all politicians are.
Thanks Josh
If I understand correctly, if your taxable income is below $400k ($450 for married filing jointly) you can still have more than $10 million in your Roth IRA. For example, you could have $100M in your Roth IRA as long as you keep your taxable income below $400K. Does this sound correct?
The big thing that got missed is that it states you can't convert AFTER-TAX dollars. Nothing at all was mentioned about converting pre-tax retirement dollars, so you can still do recharacterizations/conversions of traditional tax-deferred accounts into Roths.
This is clearly a 100% attack on the backdoor Roth since the only reason at all to place after-tax money into an IRA was to recharacterize to a Roth. Other than that it is far better to just keep the money in your brokerage account.
Brett does appear to be misreading section 138311. It stops ROTH conversions if your income is over $400k/450k in 2031. The part he's confused about is that they are stopping after-tax contributions to 401k and non-deductable IRA contributions next year. That means they are killing the backdoor contributions. It doesn't mean its killing A ROTH conversations. It does make it harder to get the money contributed in the first place to convert. This makes it even more important to contribute every cent when you can while you are younger (before your income gets too high).
Check my thinking here… "Furthermore, this section prohibits all employee after-tax contributions in qualified plans and prohibits after-tax IRA contributions from being converted to Roth regardless of income level, effective for distributions, transfers, and contributions made after December 31, 2021." The way I read this passage, they're talking only about after-tax contributions — not pre-tax. I think the intent of this section is to close the Roth IRA backdoor, not to end all Roth conversions of pre-tax contributions.
I enjoy watching you do practical walk-throughs like this. (And when you use the white board.)
1 less thing I have to think about. Too many decisions to make anyway.
From reading the legislation, it appears that pre-tax conversions will still be allowed. They’re just limiting the ability to convert after tax dollars to close the back door conversions. Still painful if you’re above the IRA contribution limit, though.
Are they getting rid of the Roth IRA conversion? NO…you said. Then proceeded to explain that they are. Did you use to work for the CDC? UNSUBED!
Great example of how hard it is to make long term plans when they continually change the rules. I'm 67 yo and began Roth conversions two years ago at a rate that would have emptied the traditional IRA's just before the minimum required withdrawals would begin. Down the toilet.
Our retirement is almost divided equally in brokerage and our roll over IRAs including wife's last 401k. I guess my fear is with what we have saved we will get hammered in RMD tax liability in our late 70s early 80s. We talked to our planner and were going to do a 72t and tap some of the IRAs to begin paying deferred tax now. When we asked about Roth he was non committed to that. He now wants us to pump the brakes on begining the 72t and live off some cash and brokerage money. Now we will have to see how those numbers pan out if they take away Roth conversions.
have already finished my roth conversions. everything that will be 401k roll into ira when i retire so i can get an annuity. live off brokerage account and roth only if we need to. but agree the backdoor needs to stay for those under 400k a yr. IMO ofcourse
Yet another lie from Biden…
I just need the backdoor roth contributions to stay.
Thank those Democrats