Don't Make THIS Common Roth IRA Mistake

Money Guy Show

Brian Preston, CPA, CFP®, PFS and Bo Hanson, CFA, CFP® | Fee-Only Fiduciary Advisors

Education, Retirement, Moneyadvice, Investing, Savingmoney, Personalfinance, Business

4.6 • 2.8K Ratings

🗓️ 19 March 2025

⏱️ 55 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Josh made a mistake. Knowing his impending sticky situation, he wrote us: "I over contributed to my Roth IRA this previous year (2024) due to making too much. What should I do?" Fear not, Josh, we're here to help answer your question. Stick around for the full livestream as we break down 9 questions from you - the financial mutants! Jump start your journey with our FREE financial resources Reach your goals faster with our products Take the relationship to the next level: become a client Subscribe on YouTube for early access and go beyond the podcast Connect with us on social media for more content Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:29.9	Don't do it. Do not make this common Roth IRA mistake.
0:39.8	Raby, I am so excited because we know that sometimes in life mistakes happen.
0:45.0	Sometimes something goes a different way than we had planned or anticipated.
0:49.7	And so then we have to figure out how do we reconcile.
0:53.7	How do we fix it? And that happens all across
0:56.2	our financial lives. And one thing that I love is that we get to sit in these seats and help you
1:01.6	figure out how to correct those mistakes, or maybe even how to avoid those mistakes. So if you
1:05.7	have a question, or there's something that you're curious about, or you want us to weigh in on it,
1:10.5	we have the team right now out in the wings, collecting your questions, and we want to load you up because we do believe that there's a better way to do money.
1:19.9	So with that, creative, I almost said your name wrong, creative director, Reby, I'm going to throw it over to you.
1:24.9	Yeah, we do have a question about this potential Roth IRA mistake.
1:29.3	I think is a great question from Josh R.
1:31.6	It says, I over-contributed to my Roth IRA this previous year in 2024.
1:36.5	And that's the thing that I think you don't expect it to pop up, but it could.
1:41.3	So it was due to making too much.
1:43.3	Can I re-characterize the contribution
1:45.4	and earnings as a traditional IRA and then do a backdoor Roth before filing? So he has a
1:51.6	solution here. Do you think it's a good one? What should you do in this situation? I love this.
1:55.9	So the first part of his question is, hey, I over-contributed. One of the things that's just
1:59.8	worthwhile knowing is if you work with a large custodian, like, hey, I over-contributed. One of the things that's just worthwhile knowing
	...

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