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Just so people are aware, high income individuals can’t use IRAs. This is a direct action against middle to low income individuals. https://www.irs.gov/newsroo

Just so people are aware, high income individuals can’t use IRAs. This is a direct action against middle to low income individuals. https://www.irs.gov/newsroom/new-income-ranges-for-ira-eligibility-in-2021 https://www.irs.gov/newsroom/new-income-ranges-for-ira-eligi...

matthewbauer 5y ago
You can contribute to a traditional IRA at any income. You can only take the deduction at certain income ranges though. Also, you can “use” an IRA after you contributed to it, so you could be high income now but contributed to an IRA when you weren’t.
deleted 5y ago
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wpietri 5y ago
Oh? Then how did Peter Thiel shelter billions in a Roth IRA? https://www.propublica.org/article/lord-of-the-roths-how-tech-mogul-peter-thiel-turned-a-retirement-account-for-the-middle-class-into-a-5-billion-dollar-tax-free-piggy-bank https://www.propublica.org/article/lord-of-the-roths-how-tec... This is direct action against rich people abusing a middle-class retirement account. What percentage of actual middle-class people are investing in "private placements and single-member LLCs"? I'd guess it's close to zero. And it probably should be. The whole reason governments create retirement accounts with special advantages is to make sure people are self-supporting in old age and don't need additional state support. That means they should be investing in a broad spectrum of low-risk stuff, not exotic, hard-to-value instruments.
psanford 5y ago
No. The income phase outs only apply if you or your spouse is also eligible for a workplace 401k plan. If you don't work somewhere that offers a 401k plan, there is no income level limit for contributing to a traditional IRA.
belltaco 5y ago
Not true. >The backdoor Roth IRA conversion is a technique where investors who earn too much to contribute directly to a Roth IRA make after-tax contributions to a traditional IRA and then convert the contributed amount, and perhaps other money in the account, to a Roth IRA. https://www.thinkadvisor.com/2021/09/22/what-to-do-if-congress-locks-the-back-door-on-roth-iras/ https://www.thinkadvisor.com/2021/09/22/what-to-do-if-congre...
fxleach 5y ago
Then why do Warren Buffet and Peter Thiel have billions in them?
f3d46600-b66e 5y ago
More complicated: they can contribute to IRA and pay taxes on it, and then they can convert to Roth IRA and have tax free appreciation of the assets, and tax-free withdrawals. IANAL, IANA tax lawyer, TINALA
boogoob 5y ago
They can't contribute to a Roth IRA, but they can contribute to a Traditional IRA, just without a deduction. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits https://www.irs.gov/retirement-plans/plan-participant-employ...
itsananderson 5y ago
Untrue in practice. High income individuals have several loopholes they can use to make Roth IRA contributions. https://www.nerdwallet.com/article/investing/backdoor-roth-ira https://www.nerdwallet.com/article/investing/backdoor-roth-i... https://www.forbes.com/advisor/retirement/mega-backdoor-roth/ https://www.forbes.com/advisor/retirement/mega-backdoor-roth...
noitpmeder 5y ago
This is such a blatant misrepresentation of the facts it's scary.

matthewbauer 5y ago

You can contribute to a traditional IRA at any income. You can only take the deduction at certain income ranges though. Also, you can “use” an IRA after you contributed to it, so you could be high income now but contributed to an IRA when you weren’t.

deleted 5y ago

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wpietri 5y ago

Oh? Then how did Peter Thiel shelter billions in a Roth IRA? https://www.propublica.org/article/lord-of-the-roths-how-tech-mogul-peter-thiel-turned-a-retirement-account-for-the-middle-class-into-a-5-billion-dollar-tax-free-piggy-bank https://www.propublica.org/article/lord-of-the-roths-how-tec... This is direct action against rich people abusing a middle-class retirement account. What percentage of actual middle-class people are investing in "private placements and single-member LLCs"? I'd guess it's close to zero. And it probably should be. The whole reason governments create retirement accounts with special advantages is to make sure people are self-supporting in old age and don't need additional state support. That means they should be investing in a broad spectrum of low-risk stuff, not exotic, hard-to-value instruments.

psanford 5y ago

No. The income phase outs only apply if you or your spouse is also eligible for a workplace 401k plan. If you don't work somewhere that offers a 401k plan, there is no income level limit for contributing to a traditional IRA.

belltaco 5y ago

Not true. >The backdoor Roth IRA conversion is a technique where investors who earn too much to contribute directly to a Roth IRA make after-tax contributions to a traditional IRA and then convert the contributed amount, and perhaps other money in the account, to a Roth IRA. https://www.thinkadvisor.com/2021/09/22/what-to-do-if-congress-locks-the-back-door-on-roth-iras/ https://www.thinkadvisor.com/2021/09/22/what-to-do-if-congre...

fxleach 5y ago

Then why do Warren Buffet and Peter Thiel have billions in them?

f3d46600-b66e 5y ago

More complicated: they can contribute to IRA and pay taxes on it, and then they can convert to Roth IRA and have tax free appreciation of the assets, and tax-free withdrawals. IANAL, IANA tax lawyer, TINALA

boogoob 5y ago

They can't contribute to a Roth IRA, but they can contribute to a Traditional IRA, just without a deduction. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits https://www.irs.gov/retirement-plans/plan-participant-employ...

itsananderson 5y ago

Untrue in practice. High income individuals have several loopholes they can use to make Roth IRA contributions. https://www.nerdwallet.com/article/investing/backdoor-roth-ira https://www.nerdwallet.com/article/investing/backdoor-roth-i... https://www.forbes.com/advisor/retirement/mega-backdoor-roth/ https://www.forbes.com/advisor/retirement/mega-backdoor-roth...

noitpmeder 5y ago

This is such a blatant misrepresentation of the facts it's scary.