Hi All,
First time poster. I am currently searching for a CPA in my area [Chicagoland] to assist in providing tax advise, but in the meantime I thought I'd post a question to see if any one has any insight.
Context:
I am 24 and I just opened a Roth IRA January 2020 and maxed it out. In the same time I opened a 401k with my employer at the time and contributed a percentage of my paycheck towards it. In total, I have $7.5k in my Roth IRA and $4.5k in my 401k. I was making $65k at this employer and I have been working at a new company since August for $130k. Long story short, I have experience in two different subject matters that are not common and companies are desperate for these kind of people and I was able to capitalize. After leaving my previous employer, I rolled over my 401k into a Traditional IRA so that I can backdoor it into my Roth IRA. That will require me to pay taxes on the $4.5k come tax time, which I am okay with.
Problem:
Now that I make over $124k where my contribution limit begins to decrease and the Roth income limit caps off at $139k, I am seeing that I will only be able to contribute limited amounts for maybe another year or so and then the Roth IRA will just be sitting there. I can keep trying to Backdoor Roth it, but it's going to be a tax event every single time and I am not sure if that is worth the trouble.
Possible Solution?
Given this, I am thinking of just pulling out the $6k from the Roth IRA and using it to buy property. I live in the part of Chicago that hasn't been gentrified...YET. Therefore, property isn't as stupidly expensive as other parts of the city. My thoughts are to just buy some modest home, live in it for a few years, fix it up and then sell it for a profit. My parents bought their home in a neighboring area 6 years ago and it's already worth more than double what they paid. I know this doesn't guarantee or prove anything, just showing an example.
I am open to any ideas or suggestions. Thank you for your time.
Submitted October 25, 2020 at 08:56PM by kapnklutch https://ift.tt/31JnEaH
