Roth IRAs can be great savings vehicles for doctors. They allow your money to be contributed after taxes, grow tax-deferred, and be withdrawn tax-free when used correctly.
SECURE Act 2.0
Hope you’re all having a great holiday season. Towards the end of December, Congress passed a large omnibus bill. Included within the bill are some minor changes to the retirement landscape.
Here is a quick summary to what’s being called the SECURE Act 2.0. The first SECURE Act changed some retirement benefits back in December 2019.
Doctors: 2022 Updates for Using the Backdoor Roth Conversion Strategy
We continue to stress to our doctors the importance of funding as much as possible into their tax-free accounts. Not only is this “tax insurance”, meaning you will not have to pay taxes on these accounts in the future, but it can also have a huge impact on how much money you will have in retirement. The amount of funds you have in tax-free investments can even make a difference on how soon you reach financial independence. The more funds doctors have in a tax-free account could mean retiring sooner, or, unfortunately, it could push out retirement for those doctors who have not planned ahead.
We could be looking at some changes to this strategy in 2022 due to some proposals on Congress’ docket. Here’s an overview of both current and possible changes to the backdoor Roth conversion strategy.
