White Coat Investor Podcast

WCI #316: Roth Contributions and Conversions

May 25, 2023
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INSIGHT

Roth Account Basics and Strategy

  • Roth accounts use after-tax dollars and grow tax-free, so withdrawals are untaxed if rules are followed.
  • The general strategy is to use tax-deferred contributions during peak earning years and Roth contributions during lower income periods.
ADVICE

SEP IRA Conversion Tax Advice

  • Consider the tax impact before converting a SEP IRA to a Roth; conversion can trigger large tax bills.
  • Rolling SEP IRA funds into a 401(k) may avoid immediate taxes and keep backdoor Roth options open.
ADVICE

Backdoor Roth Rules for MFS Filers

  • Married filing separately taxpayers must use backdoor Roth IRA due to low income phaseout limits on direct Roth contributions.
  • Consult a student loan specialist to optimize Public Service Loan Forgiveness strategies for married couples with large student debt.
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