What are the current contribution limits for a Roth IRA?

It was about 220K in 2023. Over the limit, MAGI for 2024 is projected to be around $250K.

Is it possible for me to open and fund my first Roth IRA this year? I don’t anticipate my MAGI to be less than $250K till retirement, if all goes according to plan. Will this be my final opportunity to create an account?

All I want to do is create an account in order to comply with the 5-year rule. I would provide a small sum to it. Make plans to begin converting to Roth as soon as you retire, ideally at age 62. The current value of rollover IRA/401k accounts is approximately 1.4 million.

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Converting a 401(k) to an IRA has advantages and disadvantages. The benefit is that an IRA will often offer a wider range of investment alternatives. There are a few drawbacks. ERISA creditor protection is the first benefit of 401(k) accounts. This implies that they have federal protection from creditor claims in EVERY state. Since state law governs how they are handled, most states provide protection for IRA accounts, but not all do. The second disadvantage is that it will be challenging to open a backdoor Roth IRA account in the future without facing unfavorable tax repercussions. The IRS’s pro-rata rule, which mandates that a part of tax-deferred assets be dispersed alongside after-tax assets, is the cause.

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You may be paying monthly maintenance fees if you check your old 401(k) statements. Rolling them into a rollover IRA account is the best option. Rolling over a 401(k) to a regular IRA has no tax ramifications. Additionally, you are not restricted to the options you likely have in a 401(k) and can invest the funds anyway you see fit.

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If you decide to go this route, I recommend using fidelity.com for the lowest fees and the best options.

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I combined all of my 401(k) and IRA accounts into a single IRA at TD Ameritrade (now Schwab) after getting divorced and retiring in order to make tracking simpler and offer a larger range of choices.

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What you invested in has an impact on the return you are receiving. What investments did the previous 401(k) make? You made that decision.

However, it is a good idea to roll it over. either to your new 401(k) or an IRA. There are no tax ramifications for rollovers.

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It’s invested in a plan designated by my previous employer. When I called the broker, they informed me that I can’t change that, but I can transfer the funds to another account.

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Yes, roll it over. 401(k) accounts usually have limited investment options, whereas an IRA allows you to invest in better funds or individual stocks if you prefer.

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I rolled my 401k to a traditional and it was the best financial move I’ve made. I have complete control to invest.

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Yep this is what I am going to do.

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I just started selling credit cards as well, so now I’m even generating income from my holdings.