I max out a Roth IRA yearly, but this year my income is jumping significantly and my spouse and I won't be eligible for direct Roth IRA contributions anymore. We've already contributed some to those Roth IRAs (we divide out equal contributions throughout the year to end the year with maxed contributions). I know I'll need to recharacterize what's already there to traditional, then do a backdoor Roth.
Do you recommend continuing to contribute to the Roth IRA as normal through the end of the year, then recharacterize the maxed out amount to the Traditional IRA, then backdoor it back to the Roth IRA? Seems easy enough to just leave things as they are, and then on January 2, 2027, recharacterize all the 2026 contributions to Traditional, then January 3 backdoor it back into the Roth.
Alternatively, we have enough money to immediately contribute enough to max out for the year, if that simplifies everything. I could recharacterize what's already there, contribute enough to the traditional to max it out, then backdoor it all. Or, I could contribute to max out the Roth IRA now, then recharacterize the max and then backdoor it.
Does any of this matter, other than the fact that maxing immediately increases time in the market vs. regular contributions provide dollar cost averaging?
Thanks.
Double check me: backdoor Roth IRA steps
byu/strygun inpersonalfinance
Posted by strygun