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Do you basically get double taxed if you make non deductable contributions to a traditional ira? Why do it? (endlesstalk.org)

submitted 10 months ago by aredditimmigrant@endlesstalk.org to c/personalfinance@lemmy.ml

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In the US, if you make a lot, are covered by a work retirement account or you contribute to a Roth, you can't deduct traditional ira contributions right?

So that money gets added to the rest of your traditional ira monies right? and then when you hit retirement age, you have to pay income level taxes on deductions on that already post tax money right?

Why get taxed twice? What's the benefit? +Not being able to touch it til retirement age.

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[–] xp19375@sh.itjust.works 8 points 10 months ago (1 children)

The only reason to use a Traditional IRA and not a normal brokerage account is so you can backdoor it into a Roth IRA. Since you can't make Roth IRA contributions when you are above a certain income limit, but you can roll over a Traditional IRA into a Roth IRA, this let's you avoid taxes on the growth of the account.

[–] specialdealer@lemm.ee 4 points 10 months ago

This is the real answer to the question given the nuance in the question of “if you make a lot”