Sunday, January 29, 2012
My New Job - A good problem to have
As I've alluded to, at the end of February, I'll be leaving my position at a small biotech startup for a position at one of the largest pharmaceutical companies. Crunching the numbers, in order to contribute to a roth ira, I'm going to need to max out my 401k so as to lower my modified adjusted growth income (MAGI). If my dividend income (and income at work for that matter) keeps increasing as it has in the last few years, 2013 will be totally out of the question. So I guess my question is, is all of this manipulation worth it? I really don't like 401k's; I'd prefer to just contribute to the match and forget the rest, but I have no problem at all with Roth IRA's, and I'd hate to lose the ability to contribute to it. What would you do?
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I would (and am) contributing to a traditional (non deductible) IRA and then converting to a Roth immediately. That way I can work around the income restrictions since congress did away with the conversion limit. Since I only put in post tax money in the tIRA and convert the next day, there are no taxes to be paid.
ReplyDeleteThanks for stopping by. Yeah, you know I remembered hearing you could do this, but I asked the person at scottrade about it (which is where my roth is set up) and he told me you couldn't. Thanks for bringing this back up, I'll look back into it. I'm planning on setting up a traditional IRA when I leave my current job with my old 401k, so maybe I'll use that as a vehicle for conversion to the roth.
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