How often would one need to use a backdoor Roth contribution? Seems like something you would need to execute every year.
Yep, you do it every year.
Readit Newsrpais commented on Americans Are Putting Billions More Than Usual in Their 401(k)s bloomberg.com/news/articl... · Posted by u/uptown
rpais commented on Americans Are Putting Billions More Than Usual in Their 401(k)s bloomberg.com/news/articl... · Posted by u/uptown
One problem with the Roth IRA is the income phase out limits. If you're single, if you AGI is >117K, you can only contribute some percentage of the $5000 allowed for the Roth. If you're >132K, you can't contribute anything. For a married couple, those limits are 184K/194K. Granted, you can reduce your AGI by contributing to a 401K first, which allows you to take $18K off the top.
I know this doesn't affect many, but for the high-paid tech crowd, these limits right around the point in your career where you want to be pumping in money.
You can get around this by contributing to a traditional IRA and then converting it to a Roth. This is easy to do (until law changes) unless you have an existing traditional IRA where you can take a tax hit.