If I’m around the limit for a Roth IRA (110k single I believe), should I open a traditional IRA as well? I’m starting to max my 401k and want to open an IRA as well and start maxing it.
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Shaun Erickson CFP® Boston, MA
You should discuss the benefits of this with your tax advisor. If you are contributing to a 401k plan, you are probably not eligible to deduct any contributions to an IRA account.
Some people who are over the Roth contribution income limits will make a non-deductible IRA contribution, then immediately convert it to a Roth IRA (sometimes referred to as a “backdoor” Roth IRA Conversion. You should research all of the pros and cons of this technique prior to implementing, especially if you have other traditional IRA accounts which could make a portion of this conversion taxable to you.