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David P. McCabe,
WMCP®, ChFC®, CLU®
Financial Planner
Nathaniel D. High, RICP®
Financial Planner
Nicholas J. Over, CFP®
Financial Planner
Sara E. Martin
Operations Manager
Jennifer A. McCabe
Client Service Specialist
jennifer.mccabe@prudential.com
Centuria Financial Group
2333 Baltimore Blvd Suite B
Finksburg, MD 21048
Phone: 443-952-7232
May/June 2023
Traditional But Not Deductible
When investors examine their retirement investment options, they typically pay a great deal of attention to whether their contributions are deductible or not. There are a wide variety of investment accounts, from 401(k) and 403(b) plans, that offer this benefit regardless of income. For high net worth individuals, limits to how much they can contribute to these plans may leave them looking for another place to put additional monies.
The Roth IRA, which doesn’t offer deductible contributions but does feature tax-free qualified distributions, is one place to look. However, high net worth individuals often get shut out of investing in a Roth IRA due to income restrictions.
So, where can these retirement investors go if they max out on other traditional qualified accounts and don’t qualify for the Roth? A traditional, nondeductible IRA still offers potential tax-deferred gains. Talk to your financial professional to learn more.
IRA Rules
So why bother at all with a traditional IRA if you can’t defer taxes on contributions? Potential tax-deferred growth of your investments is the four-word answer. Additionally, the percentage of your contributions to investment gain also won’t be taxed when you begin distributions.There are other alternatives, including taxable investments and potentially qualifying for the Roth in some years by shifting income, so talk to your financial professional to learn if this approach is right for you.
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David P. McCabe, Nathaniel D. High, and Nicholas J. Over are Financial Planners with, and offer securities and investment advisory service through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
LPLE and LPL Financial are not affiliated with Centuria Financial Group.
This newsletter is general educational information provided by a Prudential Financial Professional and is not intended to market or sell any specific products and services, but rather provide general information about the subject matter covered only.
Centuria Financial Group and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
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