[Jenny]

If I don’t qualify for a tax deduction, is there still a good reason to contribute to an IRA? I understand that Traditional IRAs typically offer tax-deferred growth, but without the upfront deduction, does it still make financial sense?

Are there long-term benefits, such as tax-free growth in a Roth conversion or other advantages I might be overlooking?

I’d love to hear different perspectives and experiences on this!

[Alex]

Do a back door Roth. If you don’t qualify the decision to use a Roth is that much easier

[Alex]

Also, if you don’t qualify and want a tax deduction contribute to your employer plan.

If you’re self employed get a SEP ira or a solo 401k!

[Jamie]

your future self will appreciate retirement savings now unless you’re already set for future you

[Justin]

Need to weigh out the negatives. Retirement accounts force you to miss out on life now to save 15% on capital gains. For example if you have a pension you will never get to the 12% tax bracket on your 401k for withdrawing money.

We are switching most of our pre tax to post tax savings so we can live our lives and have flexibility.

I can’t use my Roth IRA to buy land I want to live on for example.

[David]

There’s potentially more options to choose from than what you want to invest in than an employer-sponsored retirement plan, although most of them now have low-cus index funds

[Megan]

You’d want to do a backdoor Roth IRA to enjoy the tax free growth and comparatively easy access to funds for early retirement

[Jeff]

As others note: Roth IRA. Tax free growth, tax free distributions, and no required minimum distributions.

[Abigail]

You might not. Especially if a backdoor Roth runs afoul of the pro rata rule in your case.

Huge headaches if you do backdoor Roth IRA without a clean (empty) trad IRA.

[Cody]

You probably shouldn’t contribute to a Traditional IRA if you can’t deduct it – unless you’re making a contribution to immediately convert to a Roth IRA via the backdoor without pro-rata taxation.

[Sean]

It doesn’t make sense to make a non-deductible contribution to a traditional Ira and leave it there.

It generally makes sense to either do a Roth IRA contribution or a non-deductible traditional Ira contribution and then do a Roth conversion.

[Trevis]

You probably shouldn’t. I’d do a backdoor roth or a taxable brokerage account.

Traditional Ira’s for a working person who can’t get the tax deduction has never made a lot of sense to me.

[Vinod]

One potential reason would be to control capital gains tax for any changes in your investment positions within IRA. There are no immediate tax implications on your trade within an IRA.

For example, if your investment on a stock (eg. Nvidia) increased significantly and you want to sell some and invest in some ETFs.

If you do that within an IRA, you won’t have to pay capital gains tax for that this year.

You will eventually pay capital gains tax for the gains whenever you withdraw finds from an IRA (if it is not Roth IRA), but you can time it based on your other incomes at that time to reduce the capital gains tax rate.

[Author]

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