Back Door Roth For Non-Working Spouse
Given this isn’t changed yet, is it still worth the trouble to do a back door Roth conversion for a non-working spouse, esp. if we are planning to retire in March?
I am still working thru March so I’m assuming it would make sense for me.
Permalink Submitted by Alan - IRA critic on Tue, 2022-01-04 00:33
Yes, it makes sense if your MAGI is too high for direct Roth contributions. If you are no longer working after March, might your 2022 MAGI be low enough for a direct Roth contribution? Or perhaps you are referring to 2021 contributions and MAGI is too high in 2021. If that’s the case, I would make the non deductible 2021 contributions and convert them ASAP since the sooner you act before any legislation is signed, the better chance the conversion will stick. it’s not clear how Congress, IRA custodians and/or the IRS would treat transactions already done, but taxpayers and custodians will be quite unhappy if there are any retroactive complications to any legislation disabling the back door Roth.
Permalink Submitted by Blue_Sky on Tue, 2022-01-04 02:15
We definitely don’t qualify for 2021, nor for 2022, even with retirement in March as we get a deferred compensation payment in Feb. that will put us over the threshold for 2022.