Backdoor Roth IRA? Avoid These 5 Mistakes

If an investor earns too much to directly contribute to a Roth IRA, there is an opportunity to open a traditional IRA and then convert it to a Roth IRA. However, there can be potential issues that you should think about before doing this. Morningstar discusses five common mistakes that investors run into when doing a backdoor Roth.

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Source Article: https://www.morningstar.com/articles/687449/backdoor-roth-ira-avoid-these-5-mistakes

Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including (but not limited to) a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.  Investing involves risk, including the potential loss of principal. Any references to protection benefits, safety, security, and lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified tax professional for guidance before making any purchasing decisions. Our firm is not affiliated with the U.S. government or any governmental agency. This material is intended to provide general information and is believed to be reliable, but accuracy and completeness cannot be guaranteed. Gregory Ricks & Associates is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Gregory Ricks & Associates are not affiliated companies. 1299848 – 4/22