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Backdoor Roth when not eligible for 401k
Old 12-08-2021, 01:00 PM   #1
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Backdoor Roth when not eligible for 401k

I'm starting a new job in January at a small company that doesn't allow enrollment into the 401k plan for the first year. At my salary level ($175k), I am not eligible for a Roth IRA, so I've been doing a backdoor Roth for the past few years.

If I go with a traditional IRA next year in lieu of a 401k, that complicates doing a backdoor Roth because the calculation is based on the total value of all IRA holdings. So do I have to choose between either doing a maxed deductible IRA and a Roth contribution? Or are there other strategies that might work better?

Do any of you have a similar situation? If so, what did you do to maximize your retirement savings?
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Old 12-08-2021, 01:22 PM   #2
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The calculation is based on the total of all IRAs, and that excludes 401ks. When I retired I had a substantial 401k but the year following my retirement I was able to convert the whole of my existing IRA to a Roth without any impact from the 401k. The following year I then rolled by 401k to an IRA.
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Old 12-09-2021, 11:00 AM   #3
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Quote:
Originally Posted by NinjaPigeon View Post
I'm starting a new job in January at a small company that doesn't allow enrollment into the 401k plan for the first year. At my salary level ($175k), I am not eligible for a Roth IRA, so I've been doing a backdoor Roth for the past few years.

If I go with a traditional IRA next year in lieu of a 401k, that complicates doing a backdoor Roth because the calculation is based on the total value of all IRA holdings. So do I have to choose between either doing a maxed deductible IRA and a Roth contribution? Or are there other strategies that might work better?

Do any of you have a similar situation? If so, what did you do to maximize your retirement savings?
Wouldn't the only reasonable option be that you continue to do backdoor Roth next year? You stated you are not eligible to make a deductible IRA contribution because of your salary.
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