JUNE 21, 2018   |   VIEW AS WEBPAGE
Presented by Land Rover Des Moines
Land Rover Des Moines

Urbandale certified financial planner Adam Obrecht walks clients through the intricacies (and value) of the Backdoor Roth.

The Backdoor Roth, a Point of Entry for HNW Investors

Roth IRAs are a great way to invest for retirement funding, since earnings are free of taxes. But a big drawback is that they’re not available to high net worth people (adjusted gross income of $135,000 for an individual taxpayer, or $199,000 for married filing jointly). Ah, but there is a backdoor that will allow you in. It actually is called a Backdoor Roth, and it allows someone with income above those levels to set up a Roth account as long as they transfer the funds in from somewhere else, e.g., a traditional IRA.

Congress did not tinker with Backdoor Roths when it passed the 2017 tax overhaul. That’s mainly a good thing; though they might have simplified matters, Urbandale-based certified financial planner Adam Obrecht, who operates AO Wealth Advisory, said input from an expert is vital.

"Having someone know your whole story before doing one is important," he said. Do you have multiple tax-favored savings-investing plans, for instance? Do they bump up against IRS rules on aggregating these accounts?

Backdoor Roths combine two different pieces of tax code to allow contributions to Roth IRAs.

1. Nondeductible contribution to an IRA ($5,500 per person under 50 or $6,500 for people 50 and over).

2. Conversion from an IRA to a Roth IRA (the money contributed).

"While anyone can make a nondeductible contribution to an IRA, only people that do not have other tax-deferred IRA assets would be considered for step 2 of converting money to a Roth, said Obrecht.

What a Roth owner will find if they qualify is the ability to transfer as much money as they have in their traditional IRA into the Backdoor versionthere is no annual contribution cap. You just have to pay any applicable taxes. Nor is there a cap on the AGI of the account holder who is setting up the Backdoor. And there is no required annual distribution as there is with a traditional IRA (the year in which the account holder turns 70½). So you can accumulate wealth right up to your last moment on earth, should you be so inclined (there are required distributions after death).

As with a regular Roth account, we then have the beauty of accumulating profits from investments that can be tapped tax-free. On the flip side, of course, there is no deduction for any investment losses. But then, you’re not in this game to lose money, right?
dsm Magazine

Legacy Bridge

Tell Us Your Favorite Tables and Sections for Fine Dining

Visiting your favorite restaurant, do you aim for a snug little corner booth for a romantic evening out? Or do you prefer something out in the open where you can keep an eye on things? What about a booth versus a table? And a round table versus an oblong table? Maybe near the bar? Or maybe at the bar?

Where you sit—and how they light it, how they furnish it—all can affect your dining experience. I get grumpy when I’m near the kitchen (not a big fan of the attendant noise). And while I don’t mind eating at the bar when I dine alone, I can’t stand sitting in a nice restaurant only to see that the television has been tuned to a cage fighting match (please, complain to management, just as I did).

So we’re taking a poll. We’re asking you to let us know which table or booth you prefer at some of your favorite restaurants. And why. Oh, and which restaurant or restaurants. We’ll publish the results in an upcoming issue. And initials are OK if you prefer to retain some anonymity for that cozy little corner.

Find me at
dsm Magazine

801 Chophouse

Remember Sages Over 70 Nominations, Due in 10 Days

Reward the local mentors, civic leaders and role models who have influenced you by nominating them to be honored as Sages Over 70. Through their creativity, talent and vigor, such people have helped our community grow and flourish.

Business Publications' dsm magazine honors these remarkable achievers every November in print and in ceremonies with our annual Sages Over 70 designation. To nominate a leader you know, return this nomination form by July 1. The nominee needs to be age 70 or older and should meet the spirit of these criteria:
  • Has demonstrated leadership through decades.
  • Has contributed and still contributes to the betterment of the community.
  • Has been a role model and mentor to others.

dsm Magazine

Long overdue for girlfriend getaway? Start planning now for a quick weekend to Edina, Minnesota.

Just outside of Minneapolis, Edina is one of the area’s best shopping destinations, filled with cool boutiques, great restaurants, pampering spas and fun fashion and art events throughout the year. > FULL ARTICLE

dsmWealth's Suggested Reading: What You Need to Know

  • Investment adviser Eric Parnell reports that a trade war wouldn't be a sideshow but a "main event."


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