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What happens to a Roth IRA after income jump?

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  • What happens to a Roth IRA after income jump?

    New PGY-1 here with limited knowledge. It seems like alot of advice of advice I've come across for residents emphasizes opening a Roth IRA in residency and maxing it out each year. What doesn't seem to be as clear, is what to do with all of this after you finish residency and make the jump to a full time attending salary. I'll be in a field where I will be earning more than the income cap for being able to contribute to a Roth IRA, so what should I do with the funds I've put into the Roth IRA at that point? Do I just leave it at that point for the next thirty years and let it grow, or do I am to convert it into a traditional IRA that I can backdoor funds into or.....? I literally have no idea.  Thanks for the input...

  • #2
    Your current Roth will stay intact. After your income jumps, you can contribute, tax-free, to a backdoor Roth IRA if you don't have any pre-tax IRAs in your name. See Explaining Backdoor Roth IRAs and numerous articles/posts on the forum and the WCI blog.
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


    • #3
      You leave it alone to grow, or (even better) you open a traditional IRA account with the same provider and use that to make future contributions to the Roth IRA via the backdoor method (where you make a contribution to the traditional IRA using after-tax money, then roll that contribution over into the Roth IRA a few days later).  Don't convert it into a traditional IRA!