Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I would like to rollover my existing Traditional IRA into a Roth IRA. Unfortunately (fortunately) my household Adjusted Gross Income is just over the $100k cutoff.

For 2005, I plan on increasing my 401k contribution to the full 15% so that I can get my AGI (Adjusted Gross Income) below the 100k mark and (finally) roll my traditional over to the Roth.

In the meantime, I want to establish a Roth IRA for 2004 and fund it with the max $3000 contribution.

Whew...now for my questions.

Are there any roadblocks to rolling the traditional IRA into an EXISTING Roth IRA (as is my intention for 2005)?

If no roadblocks, can I still contribute the max $4000 in 2005 to the Roth or will the funds from my rollover supercede/exclude me from making this contribution?

Lastly, are there any other creative ways to reduce my AGI for 2005, aside from the aforementioned 401k contribution bump?

Thanks in advance for the advice.
Print the post Back To Top
No. of Recommendations: 0
You probably need to talk with a tax advisor to get "creative" with your tax return. Obviously you can make charitable contributions, buy a hybrid, have kids, hide your money in the Cayman Islands. With your high AGI, are you sure you are prepared for the tax burden? Your roll-over would not count towards your 2005 contribution.

You might visit these tax-related boards for additional ideas:

http://boards.fool.com/Messages.asp?bid=114753

http://boards.fool.com/Messages.asp?bid=100155

Fuskie
Who would want to make sure you are planning on living off more than $100k in retirement...
Print the post Back To Top
No. of Recommendations: 0
Welcome MickFink. Glad you could join us.

I think Fuskie covered the last part of your question very well. Let me tackle the other two--

"Are there any roadblocks to rolling the traditional IRA into an EXISTING Roth IRA (as is my intention for 2005)?"

No, as long as you otherwise qualify in terms of AGI, the Roth conversion sum may be combined in your preexisting Roth.

"If no roadblocks, can I still contribute the max $4000 in 2005 to the Roth or will the funds from my rollover supercede/exclude me from making this contribution?"

Yes, you can still make the $4K contribution. Rollover and contribution are completely separate and do not affect each other.
Print the post Back To Top
No. of Recommendations: 0
Thanks for the advice...now if I can just find a way to fund this grand scheme of mine. :-)
Print the post Back To Top
No. of Recommendations: 0
Thank you for the warm welcome and the advice.
Print the post Back To Top