Back door Roth = putting more than 7000 a year to ROTH IRA = converting 401K to ROTH IRA through traditional IRA rollover. They are the same thing.
401K to ROTH IRA conversion is worth it if there are growth in ROTH IRA because the growth in ROTH is tax free. But if she just want to put her money in cash or low growth investment, maybe it's not worth to convert. Just take the RMD maybe okay.
（ 当然要先扣税） ，这样做可行吗？ Rollover是不是不占contribution 的限制？ 我前几天弄错了，引起了很多的问题， 是给系统搞的，我在计算转RMD 的钱时，显示出我可以转到Roth IRA, 但是今天再弄时， 就不可以转了。但这样做就算是可以转，也不一定值得，先扣税后再去拿Roth IRA 可以带来的增值免税，要是钱不多的话就划不来了， 还不如存着延税。看来RMD转出的钱， 除了到银行和自己的Brokerage account, 没有什么别的去处了。
Contribute to ROTH IRA: 如果还有工资的话，可以存$7000去Roth IRA。这个和RMD没关系。RMD不是earned income。如果你这个亲戚只有RMD而没有工资，那么他不能contribute。
Convert to ROTH IRA：你的亲戚可以把Traditional IRA里面的钱全部或者部分转成 ROTH IRA。这样可以避免以后RMD。但是转的钱要交税。如果现在的钱在401K里面，他可以先转到Traditional IRA，再转成ROTH IRA。
不多的问题，Back door Roth IRA现在可以做吗？要是72岁后的税率低于现在那就不用做了。2） 从401 convert to T-IRA 有什么限制？ 这个网上也好象查不到。 谢谢！
Back door Roth = putting more than 7000 a year to ROTH IRA = converting 401K to ROTH IRA through traditional IRA rollover. They are the same thing.
401K to ROTH IRA conversion is worth it if there are growth in ROTH IRA because the growth in ROTH is tax free. But if she just want to put her money in cash or low growth investment, maybe it's not worth to convert. Just take the RMD maybe okay.
Assuming Growth(x) is the same, P being the saving over the years. Assuming tax rate is the same 24%
1. 401K at retirement = (P+Growth(P)) => after tax => (P+Growth(P))*76%
2. After tax investment at reitrement = (P*76%) + Growth(P*76%) = (P+Growth(P))*76%
1 and 2 are the same. The only difference is that in (2), you have to pay CGT, while 1 is already after tax.
So assuming Growth(x) function being the same, 401K wins.
另外$3000即使放了也是nondeductible contribution。是不是最好就放$3000 deductible contribution to traditional ira，$3000到roth ira，因为反正这另外$3000也不deductible？谢谢！