If you earn too much to contribute directly (2025 limits: $161,000 single, $240,000 married filing jointly), we suggest this as strategy for you.
How it works:
- Contribute to a traditional IRA (non-deductible, up to $7,000 in 2025, or $8,000 if 50+).
- Convert that contribution to a Roth IRA. Since its after-tax money, you’ll owe little to no tax on conversion.
Why it can be a good fit:
- Roth IRAs grow tax-free, and qualified withdrawals are tax-free.
- No required minimum distributions (RMDs) in retirement.
Watch out:
- Pro-rata rule: If you have pre-tax IRA funds, taxes may apply on conversion.
- Consult a tax pro to avoid surprises.
Maximize your retirement savings with this smart workaround. Questions? reach out to the financial advisors at Kerr Wealth Advisors in Blue Bell, PA.
H. Brad Kerr IV, Vice President/ Wealth Management, Financial Advisor
215.619.3926/ bkerr4@janney.com
1767 Sentry Parkway West Suite 110 Blue Bell, PA 19422
This is being provided solely for informational and illustrative purposes, is not an offer to sell or a solicitation of an offer to buy any securities. The factual information given herein is taken from sources that we believe to be reliable, but is not guaranteed as to accuracy or completeness. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of Janney Montgomery Scott LLC or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed here. No investment strategy, including diversification or asset allocation, can protect against market risk, loss of principal, or volatility of returns. Past performance is not indicative or a guarantee of future results. The concepts illustrated here have legal, accounting and tax implications. Neither Janney Montgomery Scott LLC nor its Financial Advisors give tax, legal, or accounting advice. Please consult with the appropriate professional for advice concerning your particular circumstances.
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