Say I roll over my ira into a roth IRA. THe 1st year my wife and myself are under the cap as far as joint sallary go. Year 2 we make more than the cap. What happens? What should we do?ThanksJon Emmet
jemmet:<<Say I roll over my ira into a roth IRA. The 1st year my wife and myself are under the cap as far as joint salary go. Year 2 we make more than the cap. What happens? What should we do?>>Which cap are you talking about? The 100K max AGI to convert or the 150K cap to contribute? If your entire Trad. IRA was converted this year, then next year's salary doesn't matter, you don't need to convert any more money (& aren't required to "un-convert," either). This includes if you took the 4 year ratable spread of the conversion income, since the conversion money doesn't count towards the $100K AGI limit (but it does in the other respects). If you're talking about Roth contributions, the same logic applies: if you're under the max AGI, you may contribute. If you're over the limit, you need not remove money from the account; you just can't contribute any more.Chris
Greetings, Jon, and welcome. You asked:<<Say I roll over my ira into a roth IRA. THe 1st year my wife and myself are under the cap as far as joint sallary go. Year 2 we make more than the cap. What happens? What should we do?>>I assume you mean that in the year of the rollover your joint AGI is $100K or less and that in the following year it exceeds $100K. In that instance, all that happens is you are unable to rollover any additional IRAs to a Roth. The rollover in the prior year is completely unaffected. All that counts is your AGI in the year the rollover occurs.Regards….Pixy
I believe that everyone should buy a $2000 Roth IRA every year if he or she qualifies.If your income is too high this year for a Roth, buy a conventional non deductable IRA. The time may come when your earnings may not preclude converting to a Roth in a future year.If earnings should ever permit, put the maximum amount you qualify for into a deductable IRA.Everyone who works can qualify for some kind of IRA.The Roth is the best bet in the long run, whether purchased as such initially or converted at some future point.Ther are good reasons for this strategy. Have a look at some of the outstanding info on IRAs at http://www.rothira.comMuch food for thought if you have the time to study it.
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