Do YOU want to better your savings for retirement? Consider converting your IRA to a Roth. We must be prepared for the realities of a longer retirement, taxes, aging parents, and long-term healthcare. Roth conversions may be the answer for many of us. Why? #shareUBS…(read more)

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Saving for retirement can be a daunting task, but thankfully there are various tools and strategies to help make the process easier. One such tool is the Roth IRA, a retirement account that can offer tax-free growth and withdrawals in retirement. However, there are limits to how much you can contribute each year, which can make it challenging to fully fund your retirement goals. That’s where “supersizing” your Roth comes into play.

Supersizing your Roth refers to utilizing strategies and tools to contribute as much as possible to your Roth IRA, potentially exceeding the annual contribution limit of $6,000 for those under 50, or $7,000 for those over 50. Here are three ways to supersize your Roth:

1. Backdoor Roth IRA: If you earn too much to contribute to a Roth IRA directly, you may still be able to make contributions through a backdoor Roth IRA. This involves making a nondeductible contribution to a traditional IRA and then converting it to a Roth IRA. While this may incur some taxes, it can still provide tax-free growth and withdrawals in retirement.

2. Mega Backdoor Roth: For those with high incomes and access to a 401(k) plan with after-tax contributions, the mega backdoor Roth strategy can be a powerful tool. It involves contributing after-tax dollars to your 401(k) plan, then converting those contributions to a Roth IRA. This can allow for much larger annual contributions to a Roth IRA, potentially up to $58,000 per year.

3. Roth 401(k) Contributions: If your employer offers a Roth 401(k) option, consider maxing out your contributions each year. While it won’t directly increase your Roth IRA contributions, it can still help increase your tax-free retirement savings and potentially provide more flexibility in retirement.

Supersizing your Roth can provide a powerful boost to your retirement savings, but it’s important to understand the rules and limitations of each strategy. Working with a financial advisor can help ensure you are utilizing the best tools and strategies for your specific retirement goals. With the right plan in place, you can feel confident in your retirement readiness and enjoy a financially secure future.