<p>It seems like a logical move to use available retirement planning strategies, especially since my SS will be low and I have no pension and very little IRA. Fortunately, H’s pension will cover me at a reduced amount for the rest of my life. I haven’t converted my traditional IRA into the ROTH yet, but have contributed for 2013 and plan to contribute for 2014 and then roll both over. </p>
<p>If we can manage it, we may pass our Roth IRAs to our kids or grandkids; if we need it, we will be glad to have them and see them grow tax free. </p>
<p>I really don’t know much about annuities, except you have to be sure to get VERY secure companies that will be around for many decades. Moody’s rates them. When we had severely injured clients, we always tried to get them annuities from the highest rated companies. </p>
<p>Like Dad<em>of</em>3, I’ve been hesitant about the backdoor ROTH. H and I do max out our 401K. My 401K started to offer a ROTH option a few years ago, so I do take advantage of that. H has a couple of other 401K that he has rolled over to fidelity and vanguard - so am concerned that if he does a backdoor ROTH, he will be hit with taxes for all those IRAs. And it will be significant! I do have one other IRA - guess I could look at converting that to a ROTH.</p>
<p>when you say maxed out, do you mean you totally maxed out or maxed out with your employee’s matching. Because according to 401k rules:</p>
<p>"Contributions to a Solo 401(k) consist of two types</p>
<p>Type 1: Elective Deferral (401k) also known as Employee Contributions. The maximum elective deferral is $17,500,
plus $5,500 “catch-up” amount if you will be at least age 50 in 2014.</p>
<p>Type 2: Profit Sharing also known as Employer Contribution. This amount cannot exceed $51,000 for 2013, or $52,000 for 2014.
If you business type is a Corporation, the maximum profit sharing contribution is 25% of gross income.
If you business type is a Sole Proprietor/Partnership, the maximum profit sharing contribution is 20% of net income
"</p>
<p>By creating a business on side of your full time job, you can shelter a lot more under 401K, in addition, you can roll over your vested 401k or IRA to this.</p>
<p>Arisamp,
You need to research and understand backdoor IRAs and have an inventory if all your retirement accounts BEFORE you decide to do a backdoor IRA. If there are other non-ROTH IRAs in the person’s name, the conversion will be assumed to be a proportional conversion of all the non-Roth IRAs in the person’s name. </p>
<p>My understanding is that having other retirement accounts is OK, even if these accounts are funded with pre-tax money. Spouse or partner’s accounts are also ok. You should check with your CPA and do your own research to be comfortable with your choices and understand tax consequences of your actions. </p>
<p>I don’t know much about the 401k accounts in Artlover’s post, but it would be good to ask your and spouse’s employer if you and/or spouse can qualify for these accounts, where you can have a lot of funds held. The HR folks should be able to provide info about whether these plans are available at your workplaces. </p>
<p>I agree! This part really bugs me. I have a small variable annuity that I purchased a long time ago when a friend was working for a brokerage firm. I have several investment choices. If I am 100% in lets say, an S&P 500 mutual fund, and my money eventually doubles, it will be nice that I have deferred all taxes for a long time, but when I withdraw the money all those gains, that are actually capital gains and dividends, will be taxed as ordinary income. (The amount I started with will be my basis and will be tax free). It is one aspect of these investments, and IRAs and 401ks also, that bug me a little bit. Sometimes I think I would have been better off with certain investments in a regular taxable account. </p>
<p>Another thing that really bugged me… bugged me enough to move this small investment, was it is the product of a very big firm in the industry, but when I was curious to know what my redemption options were, as in how much can I receive per month for the rest of my life if that is how I choose to get the money out… I could do NOTHING online. I had to call and ask verbally, specifying every conceivable option… me only, with survivor option, 5 year minimum payout, 10 yr minimum payout etc etc… and then 2 weeks later when I heard nothing I had to call back and ask again. Finally got a package in the mail, many pages of tables with headings that were not really comprehensible. I got the feeling they prefered to hang on to my money forever. </p>