Hi. First time poster here. Would appreciate any advice/insight from this group.
I max out my 401K most years, depending on 1099 income screwing up the calculus, and I have a Roth IRA. Since I am in the highest tax bracket and make too much money, I can't directly contribute to the Roth. Last year I made a backdoor contribution of $2100.
My question is: If I am in the highest tax bracket, does it still make sense if I am making minor contributions to my Roth? The majority of my savings go into the 401K first, then an HYSA. But If I can pay out ~ $900 from my HYSA to cover the taxes on the Roth conversion and now it grows tax free until retirement, does it still make sense to do so? I'll have about $4000 in the Roth IRA by end of the year, and I will have paid ~ $1800 in taxes. If I don't touch it for 30 years, does it make a diff in the grad scheme of things, that I paid $1800 in 2024? I ask because I have another situation like this coming up in June and I want to know what to do with approx $2000 in contributions.
TIA folks!
original posted by Queen_NAB to r/personalfinance on Tue, 27 Feb 2024 15:50:59 GMT.