Traditional IRA/Roth IRA Contributions after RMD Age?
What are general things to consider when trying to determine whether or not to make a traditional/roth IRA contribution after RMD age? Client plans to continue working for several years and income levels allows him/her to make either a tax-deductible traditional ira contribution or a roth contribution.
Permalink Submitted by Alan - IRA critic on Tue, 2023-02-07 20:53
After 70.5 any deductible TIRA contribution would offset any QCDs she would make in the future. For example, if she made a 7000 deductible contribution, the first 7000 of QCDs made after 70.5 could not be reported as QCDs. Therefore, if she plans QCDs she should make Roth contributions, but if she is not planning for QCDs, she would then make the deductible TIRA contribution if her current year marginal rate is higher than after she retires. If current marginal rate is lower, then the Roth contribution would be preferable.
Permalink Submitted by Matthew Ottusch on Tue, 2023-02-07 21:54
Does a deductible TIRA contribution by one spouse offset the ability of the other spouse to utilize QCDs? For ex, wife makes a deductible TIRA contribution at age 71 of 7000, and husband wants to make 7000 of QCDs at 73, does her deductible TIRA contribution at 71 mean his 7000 of QCDs cannot be reported as QCDs? Assume married filing jointly
Permalink Submitted by Alan - IRA critic on Tue, 2023-02-07 22:04
The spouse’s IRAs and QCDs are totally separate from each other, therefore there is flexibility with respect to which spouse makes the QCDs. But that also means that the spouse making the QCDs would have to make a Roth contribution or spousal Roth contribution. The other spouse would make the deductible contribution.