Reply to Bill proposed to crack down on backdoor roth (and other loopholes)

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[quote=Anonymous][quote=Anonymous]Immediate PP, I think the key point to make is that, if this passes:

1) Conversions of post-tax IRA contributions will be no longer allowed as of jan 1 2022.  This is generally known as back door Roth.

2) Conversions of pre-tax IRA contributions will be allowed for the next 10 years (or whatever that specific much later date is), then be disallowed

While Tradtional IRAs obviously  can accept post-tax contributions in additional to pre-tax, this wasn't a popular thing to do unless the intent was to use the post tax for aa backdoor Roth.  There may be benefits to contributing post-tax to a Trad Roth ira, but I'm not familiar with what they are and why people would do it.[/quote]

Agree with your points.

Your (2) above will likely benefit retirees or near-retirees who were planning on such a conversion strategy.  Most employed folks would likely just contribute to Roth 401K directly.

I don't see the point of a post-tax Traditional IRA either.  Mathematically it's the same as paying taxes now and letting your money grow tax free.  I think it's a gamble on your taxes being lower in retirement vs. now. By a lot.[/quote]

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