Like Compound Interest, the Benefits Grow With Time

Here are some examples of what you can do right now.

• An eligible married couple has one month left to move $28K savings via the Backdoor Roth for 2021 & 2022, and, going forward $14K+/year. Only one spouse needs earned income.

Had they started ten years ago, they could have each moved $72K from savings to their Roth IRAs, they’d now have $340K protected, permanently tax-free, owing no taxes on the $196K gain (S&P 500).

• One client was happily maximizing their 401(k) each year. When we learned they also qualified for the 403(b) plan, we nudged them to start moving, tax-free, an add’l $20K/year from taxable savings to their Roth IRA, through a combination of pre-tax contributions and IRA conversions.
• A business owner, or even a side-gig worker, can tap up to $60K+/year of underutilized retirement contributions in 2022 to effectively convert taxable savings or “cash in their checking account” into a Roth IRA through a series of steps.

A solo-401(k) plan like this can be set-up in addition to their day-job 401(k) plan.

You can still set-up a 2021 solo-401(k).

• We’ve helped clients set-up a wide range of defined contribution and defined benefit plans that can enable up to $150K+/year/person in retirement contributions.

Key ingredients to eliminating the tax drag:

1. You must first have taxable savings
2. You have earned income (sorry, retirees!)
3. You have, or can set-up, underutilized annual retirement benefits

As always, work with your tax or financial planning professional before pulling the trigger. In the meantime, see our infographics and Roth IRA articles below.

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