Hello everyone,
I have contributed to the traditional IRA with post tax money for several years that has been documented with form 8606. Now I am in retirement and like to take it out or maybe convert to Roth IRA? However, this portion of money was in the same traditional IRA account with the pre tax money I put in earlier when my tax bracket was low. What is best way to get this portion of money and gains out from the tradition IRA? Thanks.
How to deal with the money that was contributed to traditional IRA post tax?
byu/jjha66 ininvesting
Posted by jjha66
2 Comments
Edited the beginning because I forgot a relevant detail here.
You certainly could look into rolling over some of that into a Roth, without increasing your current tax burden. That can happen in certain circumstances.
You won’t be able to choose. Due to the pro-rata rule, you will always be withdrawing a portion of post-tax and pre-tax money according to their ratios. It applies to conversions too. That is why it’s recommended to empty your pre-tax balance before trying to backdoor.