Page 6 - The Shores of Jupiter - April '23

Page 6, The Shores
Financial Focus

Open The (Back) Door To A rules. In 2023, you can contribute the full amount to a In any case, if you convert pretax assets from your
traditional IRA to a Roth IRA, the amount converted will
Roth IRA — $6,500, or $7,500 if you’re 50 or older — if
Roth IRA your modified adjusted gross income is less than $138,000 be fully taxable in the year of the conversion. So, if you
(if you’re single) or $218,000 (if you’re married and were to convert a large amount of these assets, you could
By Sally Sima Stahl filing jointly). If you earn more than these amounts, the face a hefty tax bill. And since you probably don’t want
There aren’t many amount you can contribute decreases until it’s phased out to take funds from the converted IRA itself to pay for the
drawbacks to having a high completely if your income exceeds $153,000 (single) or taxes, you’d need another source of funding, possibly
income — but being unable $228,000 (married, filing jointly). from your savings and other investments.
to invest in a Roth IRA A Roth IRA is attractive because its earnings and Ultimately, then, a backdoor Roth IRA strategy may
might be one of them. Are withdrawals are tax free, provided you’ve had the account make the most sense if you have few or no pretax assets in
there strategies that allow at least five years and you don’t start taking money out any traditional IRA, including a SEP-IRA and a SIMPLE
high-income earners to until you’re 59½. Furthermore, when you own a Roth IRA. If you do have a sizable amount of pretax dollars
contribute to this valuable IRA, you’re not required to take withdrawals from it when in your IRA, and you’d still like to convert it to a Roth
retirement account? you turn 72, as you would with a traditional IRA, so you’ll IRA, you could consider spreading the conversion over
Before we delve into that have more flexibility in your retirement income planning a period of years, potentially diluting your tax burden.
question, let’s consider the and your money will have the chance to potentially keep Consult with your tax advisor when considering a
growing. But given your income, how can you contribute backdoor Roth strategy. But if it’s appropriate for your
situation, it could play a role in your financial strategy,
to a Roth?
Identifying You may want to consider what’s known as a “backdoor so give it some thought.
This article was written by Edward Jones for use by
Roth” strategy. Essentially, this involves contributing
Early Reading money to a new traditional IRA, or taking money from your local Edward Jones Financial Advisor, Edward
Jones, Member SIPC.
an existing one, and then converting the funds to a Roth
Edward Jones is a licensed insurance producer in
IRA. But while this backdoor strategy sounds simple, it
Struggles involves some serious considerations. all states and Washington, D.C., through Edward D.
Jones & Co., L.P., and in California, New Mexico and
Specifically, you need to evaluate how much of your
Massachusetts through Edward Jones Insurance Agency
traditional IRA is in pretax or after-tax dollars. When
you contribute pretax dollars to a traditional IRA, of California, L.L.C.; Edward Jones Insurance Agency
By Jim Forgan, Ph.D., your contributions lower your annual taxable income. of New Mexico, L.L.C.; and Edward Jones Insurance
School Psychologist However, if your income is high enough to disqualify you Agency of Massachusetts, L.L.C.
Ask any elementary from contributing directly to a Roth IRA, you may also Edward Jones, its employees and financial advisors
school teacher and earn too much to make deductible (pretax) contributions cannot provide tax advice. You should consult your
they will confirm that to a traditional IRA. Consequently, you might have qualified tax advisor regarding your situation.
many kids struggle with contributed after-tax dollars to your traditional IRA, on Contact us at (561) 748-7600, Sally Sima Stahl, AAMS,
reading. School staff do top of the pretax ones you may have put in when your 1851 W. Indiantown Road, Ste. 106, Jupiter, FL 33458.
their best to help with income was lower. (Earnings on after-tax contributions
limited resources but will be treated as pretax amounts.)
many take a wait and
see approach. Waiting
does not benefit your
child. As an astute parent or family member, follow
your instinct to determine the root cause of your
child’s reading struggle.
Students who struggle with reading in the early
grades will eventually struggle with all academic
areas. This occurs because the curriculum in upper
grades relies more and more on independent reading
skills. In fact, research studies have shown that it is
important to assess and remediate a child’s reading
skills at an early age. Researcher Joseph Torgesen
and colleagues documented that more than 80 percent
of students who were poor readers at the end of first 747-PALM
grade still performed below average at the beginning
of third grade. Don’t let your child become a reading 747-7256
failure statistic. Specialized reading help is available
when you have the right knowledge.
The keys to helping your child include following
your hunch, seeking an expert to test your child
to determine which reading program is best for
your child’s needs, and using the program with an
experienced professional. The correct reading program
can help save time, stress, and create life changing
gains within your child. We encourage you not to
accept a one-size-fits-all reading approach offered by
many schools.
Since Dr. Forgan is also a Susan Barton certified
dyslexia tester, we use unique tests that others don’t
have. Within a few weeks we give you answers and
tell you the best reading program we believe will help
your child.
Call to discuss your child as we test students ages
5.5 through college for dyslexia, learning disabilities,
ADHD, depression, anxiety, and other processing
disorders. Visit JimForgan.com or call (561) 625-4125.