What IRA am I eligible for?

[Inquiry5858]

Hello, my wife and I earn over 500k combined annually. I contribute max amount to my 401k. My wife does not have a 401k.

I make investments in Lending Club and want to look into doing this in a retirement account. What type of IRA are we eligible for?

lending club accepts:

Open your IRA with a 401(k) Rollover, IRA Transfer or ROTH Conversion. Traditional, Roth, SEP and Simple IRA accounts are all available at Lending Club.

Thanks.

 

[aja8888]

Please explain what the Lenders Club is as I have no familiarity. Thanks.

 

[LOL!]

You are both eligible for a traditional non-deductible IRA, but that would cost you more in taxes than a straight up taxable account in the long term. That would be especially irritating for such a small amount of money that can be put into an IRA annually.

However, if you can convert the non-deductible traditional IRA to a Roth IRA, then that is something. Search for "back door Roth" and read all about it and whether conversion makes sense for each of you.

For more info on IRAs, please read IRS Publication 590.

 

[Rothman]

The best way to go is to open your traditional non-deductible IRA deposit to your limit and then do a conversion to a Roth IRA the next day, since you deposited after tax money into the traditional IRA you'll have zero additional tax on the conversion as no gains yet and your Roth IRAs will grow tax free for the rest of your life!
These Roth IRAs are a great way to pass inheritance to grandchildren as after your death beneficiaries can take withdrawal based on life expectancy, and a properly invested fund can just keep on growing.

 

[Inquiry5858]

Please explain what the Lenders Club is as I have no familiarity. Thanks.

its a peer to peer lending site. [deleted link]

 

[Inquiry5858]

The best way to go is to open your traditional non-deductible IRA deposit to your limit and then do a conversion to a Roth IRA the next day, since you deposited after tax money into the traditional IRA you'll have zero additional tax on the conversion as no gains yet and your Roth IRAs will grow tax free for the rest of your life!
These Roth IRAs are a great way to pass inheritance to grandchildren as after your death beneficiaries can take withdrawal based on life expectancy, and a properly invested fund can just keep on growing.

Is there anyplace that I read more about this tactic? thanks.

 

[Alan]

Is there anyplace that I read more about this tactic? thanks.

Backdoor Roth IRA - Bogleheads

 

[Inquiry5858]

Thks