Here’s how to complete the backdoor Roth maneuver: Step one, ensure you don’t have any other IRA money. Step two: contribute to a contributory IRA, don’t deduct it, and then convert to your Roth the next day. Boom, you have now made a Roth IRA contribution with no tax consequence and skirted income limits… legally!

Sound illegal, but it isn’t! Just listen to all the benefits that will save you money!

Del Monte Group has been in business for over 35 years, cultivating relationships and building a family of lifelong clients just like you. If you need help navigating life challenges, are seeking smart, resourceful planning, or just want to find confidence and peace of mind, get in touch. We’re always here to help at 925.736.6410, Richard@APlaceOfPossibility.com, or Angela at Angela@APlaceOfPossibility.com.

YOU’RE INVESTED, AND SO ARE WE™. If you’re looking for out-of-the-box financial wellness support that offers long-term success even while navigating life transitions and challenges, we’ve got your back. Get started by scheduling a 30-minute session with Richard or Angela today

FREE INVESTMENT ANSWER E-BOOK Team DMG loves a good book, and that’s why we’re excited for the opportunity to present you with a FREE copy of the “Investment Answer” because we know it will change the way you look at investing for good. No, we didn’t write this book, but we believe it is a fantastic tool that every investor should have in his or her arsenal. Download your e-book here

DID YOU KNOW? When Wealth Is Transferred from One Generation to the Next, 70% of the time, That Generation Loses the Wealth by the End of Their Lifetime? How does all of this happen? Lack of connection, communication, and preparation. Don’t let this happen to your family. Get your FREE copy of Richard’s book: Endless Inheritance, and learn how to ensure your wealth will live on

ARE YOU READY TO BECOME A BETTER INVESTOR? We’ve got you covered! Download a free copy of our e-book, Evidence-Based Investment Insights, and discover proven principles to help you maximize your financial growth

Looking for speakers who can help navigate life transitions or help build a secure income plan for the next chapter in life? Richard Del Monte and Angela Wright have spoken at dozens of organizations in the greater Danville area and love to contribute valuable information. If you need customized wealth management insights broken down into simple, engaging content specifically for your group, get in touch today.

Facebook:
Twitter:
LinkedIn:
Instagram:

[Podcast Promos]
Discover Why Listeners Rely on Richard, Angela, and A Place of Possibility Podcast for a Lifetime of Financial Wellness Support. If You Have Questions, You’d Like Richard & Angela to Answer, Please Call 925.736.6410 or Email Us at Info@APlaceOfPossibility.com.

Love what you hear on A Place of Possibility? We want to know! Please leave us a rating on Apple Podcasts.

Tell us what you love and want to hear more of. We’re all ears.
Find us online:

Listen to all of our episodes at A Place of Possibility Podcast HQ:

Need legacy planning support? We’ve got you covered. For more information, visit APlaceOfPossibility.com/Family-And-Legacy or feel free to give us a call at 925.736.6410….(read more)

LEARN MORE ABOUT: IRA Accounts

CONVERT IRA TO GOLD: Gold IRA Account

CONVERT IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

Do You Make Too Much Money for a Roth IRA? There’s a Loophole!

A Roth IRA is a retirement investment account that offers numerous benefits for individuals looking to grow their savings tax-free. However, eligibility for a Roth IRA is subject to certain income limits. For the year 2021, if you are single and your modified adjusted gross income (MAGI) exceeds $140,000, or if you’re married filing jointly and your MAGI is above $208,000, you are not eligible to contribute to a Roth IRA. But fear not, because there is a loophole that allows high earners to still take advantage of the Roth IRA’s benefits.

This loophole is known as the “Backdoor Roth IRA” and it involves a two-step process. First, you need to make a non-deductible contribution to a traditional IRA. The contribution is non-deductible because you made it with after-tax dollars. The second step is the conversion of the traditional IRA to a Roth IRA. This conversion can be done at any time, but it’s important to note that taxes may be owed on any pre-tax earnings or deductible contributions present in the traditional IRA.

The Backdoor Roth IRA strategy has become increasingly popular among high-income earners who are not eligible to contribute directly to a Roth IRA. It allows them to still benefit from the tax advantages and growth potential offered by a Roth IRA, regardless of their income level.

There are several advantages to utilizing the Backdoor Roth IRA strategy. Firstly, contributions to a Roth IRA grow tax-free, meaning that any investment gains over time will not be subject to taxes upon withdrawal in retirement. This can result in substantial savings and allow your retirement savings to grow significantly over the years.

Additionally, the Backdoor Roth IRA allows for more flexibility when it comes to accessing your funds in retirement. Unlike traditional IRAs, Roth IRAs do not require minimum distributions once you reach a certain age. This means that you can leave your funds invested and growing tax-free for as long as you choose, without being forced to withdraw a specific amount each year.

It’s worth noting that the Backdoor Roth IRA strategy is not without its limitations and considerations. One important factor to consider is the “pro-rata rule.” This rule states that if you have other pre-tax funds in any traditional IRA at the time of conversion, you will need to pay taxes on a portion of the conversion based on the ratio of pre-tax funds to post-tax funds in all your IRAs. This can make the strategy less advantageous if you have significant pre-tax funds in traditional IRAs and may require careful planning and consultation with a financial advisor or tax professional.

In conclusion, while high-income earners may face limitations on direct contributions to a Roth IRA, the Backdoor Roth IRA strategy provides a viable loophole to still take advantage of the tax benefits and growth potential offered by a Roth IRA. By making non-deductible contributions to a traditional IRA and subsequently converting it to a Roth IRA, individuals can grow their retirement savings tax-free, providing them with greater financial security and flexibility in retirement. However, it’s important to carefully consider the potential tax implications and consult with a financial advisor or tax professional before implementing this strategy.