Permalink Submitted by Alan - IRA critic on Wed, 2017-01-04 23:53
No major disadvantages. It might make it more difficult if the taxpayer ever wants to roll this money back into an employer plan. A taxpayer may want to do that to defer IRA RMDs, or in a few states there might be creditor protection advantages with an ERISA plan.
Permalink Submitted by William Tuttle on Thu, 2017-01-05 00:32
Do you already have or will have non-deductible traditional IRA contributions? Pre-tax IRA assets (SIMPLE IRA, SEP IRA, deductible traditional IRA assets) will cause Roth conversions to be pro-rated. This will preclude the ability to do low/no cost backdoor Roth contributions.
Permalink Submitted by Alan - IRA critic on Wed, 2017-01-04 23:53
No major disadvantages. It might make it more difficult if the taxpayer ever wants to roll this money back into an employer plan. A taxpayer may want to do that to defer IRA RMDs, or in a few states there might be creditor protection advantages with an ERISA plan.
Permalink Submitted by William Tuttle on Thu, 2017-01-05 00:32
Do you already have or will have non-deductible traditional IRA contributions? Pre-tax IRA assets (SIMPLE IRA, SEP IRA, deductible traditional IRA assets) will cause Roth conversions to be pro-rated. This will preclude the ability to do low/no cost backdoor Roth contributions.