WWYD - Roth IRA eligibility questionable

[cherry1111]

Hello,

We have monthly contributions deposited into our Roth IRA year round. My husband just got a raise and bonus which I think will put us teetering on Roth eligibility this year. But it’s not entirely certain at this point if we will fall inside or outside the phase out.

Would you stop contributions now and then do a lump sum next year for 2022 if it turns out we are eligible? Or keep contributing and deal with the penalties if we end up in that range?

[flygirl]

In a normal year, I’d probably stop and then see if he qualified with a lump sum but the market is low right now so I’d want to buy now. Do you have any other options to lower your taxable income? Are you maxing on your pretax 401k options? HSA?

[tcu2003]

If you don’t have any other funds in a traditional IRA, I would put money in a traditional IRA and do an immediate rollover to the Roth IRA.

[cherry1111]

Mar 8, 2022 15:51:56 GMT -5 flygirl said:

In a normal year, I’d probably stop and then see if he qualified with a lump sum but the market is low right now so I’d want to buy now. Do you have any other options to lower your taxable income? Are you maxing on your pretax 401k options? HSA?

Good call. I don’t know why I wasn’t thinking clearly about that. We max our HSA but not yet our 401k. I think we will increase those contributions for sure. If we both increase a few % I think that would do the trick for 2022. Thanks!