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Thread: IRA question

  1. #1
    Senior Member Tradd's Avatar
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    IRA question

    I will now have to save on my own for retirement since I don't have a 401K at my new job (very small company).

    I have a Vanguard IRA that was the 401K from a previous job I left in 2006. It has a tidy sum in it, but I will need to save much more.

    This is my question: can I add to the current IRA - post-tax $$ - since it was started with PRE-tax $$? Or do I have to start a new IRA?

    I have absolutely no clue, which is why I'm asking.

    I'm 51, FYI.

  2. #2
    Senior Member Tradd's Avatar
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    So I need to start a NEW account so I don’t mix the types?

  3. #3
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    As I understand it the post-tax IRA is a Roth and you can convert a conventional to a Roth, but have to leave the money in the account at least five years to avoid a tax liability.

    Deleted previous post and clarified here.

  4. #4
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    This article may help you:

    https://www.cnbc.com/2018/06/01/how-...ve-a-401k.html

    They talk about a SEP IRA, which would be different than your current IRA. You can contribute to the one you have already and it lowers your taxable income.

    Or you can start a Roth IRA, which they explain.

    I would just call Vanguard and they will tell you everything you need to know--start there.

  5. #5
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    I know you are working in a small "shop". Talk to the boss about a pre-tax option.

    Post tax, you can put in 6000 or 7000 into a Roth once 50yo. And you can do both! You really will benefit most from the pre-tax but your employer has to pull that.

  6. #6
    Senior Member beckyliz's Avatar
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    If you want to keep your current IRA as pre-tax, you'll need to open a new one for Roth (after tax) contributions. You can put your own pre-tax contributions into your current IRA. if your employer does not offer a qualified retirement plan, the pre-tax contributions will be deductible. If your employer offers a plan, they probably won't. https://www.irs.gov/retirement-plans...-and-roth-iras
    "Do not accumulate for yourselves treasures on earth, where moth and rust destroy and thieves break in and steal. But accumulate for yourselves treasure in heaven, where moth and rust do not destroy, and thieves do not break in and steal. For where your treasure is, your heart is also." Jesus

  7. #7
    Senior Member Tradd's Avatar
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    Quote Originally Posted by beckyliz View Post
    If you want to keep your current IRA as pre-tax, you'll need to open a new one for Roth (after tax) contributions. You can put your own pre-tax contributions into your current IRA. if your employer does not offer a qualified retirement plan, the pre-tax contributions will be deductible. If your employer offers a plan, they probably won't. https://www.irs.gov/retirement-plans...-and-roth-iras
    BINGO! Exactly the info I was looking for. Employer does NOT offer a retirement plan at all.

    I forgot a friend from church is a CPA. Just sent him an email.

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