Roth contributions don't get the same upfront tax break: Investors fund Roth IRAs with after-tax money, but generally don't pay income taxes on earnings or withdrawals in retirement.
The 'only reason' to save in a nondeductible IRALordhenrivoton | E+ | Getty ImagesHigh earners can contribute to a so-called nondeductible IRA, however.
The ability to use the backdoor Roth IRA is a major benefit of these accounts, tax experts said.
watch now"The only reason you'd do [a nondeductible IRA] is if the intention was to do a backdoor Roth," Slott said.
"All high wage earners should consider looking at both a backdoor Roth IRA and a mega backdoor Roth IRA if they can't set up a Roth IRA," said Ted Jenkin, a certified financial planner and founder of oXYGen Financial, based in Atlanta.
Persons:
Thomas Barwick, Roth, Slott, Ted Jenkin, He's
Organizations:
Investors, Roth IRA, IRA, CNBC, Taxpayers, IRS, Arnold, Mote Wealth Management, Medicare, nondeductible
Locations:
deductibility, Atlanta, Hiawatha , Iowa