Today’s historically low individual tax rates, that are pending a reversion to higher rates in 2026, makes a strong case for funding a Roth today. So what can individuals do that have a MAGI above $137,000 and can’t contribute to a Roth in 2019?

 

For those individuals, there are a few things you can consider:

 

• Does my company 401k plan offer a Roth option? If so, this is a route you can use to make sure your setting aside future tax free dollars.

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• Can you contribute to a Non-Deductible IRA? You should make sure you are not subject to the IRA Aggregation Rule to fund a non-deductible IRA. 

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• Does your 401k plan allow for after-tax contributions? A caveat to this opportunity would be if you’re a business owner and your contribution would fail the nondiscrimination testing.

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• Doing a direct IRA Conversion to a Roth. You will want to consider conversion-cost averaging and be aware of potential changes to your tax bracket.

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As you start to think about whether or not now is the right time to make Roth contributions and conversions, be sure to leverage your resources. Contact your tax professional and/or your financial professional to help you make the best decision possible for your personal situation.