128 - Can I Unwind a Non-deductible IRA Contribution?

Real Personal Finance

Scott and James discuss the new contributions limits (2022) and how that impacts our taxes.

Listener Question

Can I unwind a non- deductible IRA and revert it to a retail account? My CPA suggested I put 7k aside each year (I did it once) and then put it into a backdoor Roth. My income is high (we paid 51% in effective taxes last year) and I max out my 401k (no match) at work. But here is where it gets complicated- I have an IRA, Roth, SEP IRA (from a side consulting business) and now also the non deductible IRA all in Schwab in a mic of index funds and individual dividend stocks. But my employer’s 401 k plan (Transamerica) is terrible - high fees and not great fund options. I am worried about rolling my various retirement funds (about 400k for me) into Transamerica just to put 7 or 14 k into a backdoor Roth would cost le almost as luch in fees, not to mention oppty cost when forced to sell my holdings to conform to what Transamerica offers.

Given this and the impending demise of the backdoor Roth, can I somehow convert my 7k back to a nonretirement holding?

Planning Points Discussed

• Retirement Planning
• Utilizing Time Efficiently
• Capital Appreciation
• Purchasing Power
• Other issues (IRAs, Inflation, Financial Goals, etc.)

Timestamps:

3:57 - Roth IRA Backdoor Considerations

6:02 - IRS Aggregation Rule

9:30 - Partner's Income

12:40 - Self-Employed Retirement Considerations

15:01 - Required Minimum Distributions

17:36 - Tax Planning

18:22 - Aligning Your Financial Goals

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Scott

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