Ask Terry Questions Nondeductible IRA contributions

Nondeductible IRA contributions

By Terry Savage on September 26, 2023 | Financial Planning / Retirement

I am 71, still working part-time. I have my IRA with Fidelity. I contribute the maximum each year, My nondeductible contributions on Form 8606 to date are $31,000. My questions are 1. Will I have to pay taxes on this money again when I have to withdraw it? Does Fidelity keep track of this? 2. I was told I could convert this money to a Roth IRA “through a back door method”. Is this true? Should I still be contributing post tax money to the IRA? Thank you–I always appreciate and use your advice!

Terry Says

I think you’ve reached the age when you should not make any more IRA contributions, but instead accumulate cash and either invest it or buy Treasury Bills. (

Of course, I’m saying that without knowing anything about your financial situation, liquidity, spending needs. But it seems to me that you’re unnecessarily complicating your financial life.

And do ask Fidelity if it is keeping your after-tax contributions separate from your traditional tax-deductible IRA. That would be a horrible thing if they were put in the same account, where all withdrawals are taxed as ordinary income. IN an after-tax Roth IRA, there are no RMDs and all money (including earnings) comes out tax-free.

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