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Don’t Avoid the Pro Rata Rule
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Don’t Avoid the Pro Rata Rule

Go Curry Cracker!·Go Curry Cracker·about 1 month ago
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“How do I avoid the pro-rata rule in retirement? Can I do X to avoid it?” I’ve seen this question numerous times. My general answer – don’t avoid the pro rata rule in retirement. Don’t Avoid the Pro-Rata Rule People generally become aware of the pro-rata rule because they want to do a backdoor Roth during their high income working years… that is, income is too high to: make a deductible contribution to a Traditional IRA contribute to a Roth IRA Instead, you make a non-deductible Traditional IRA contribution and then (immediately) convert those funds to a Roth. There is zero tax due on this particular Roth conversion because 100% of the converted amount is after-tax money. Ta-da!!! You have sneakily put funds in a Roth IRA and showed the IRS who’s boss.…

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