Page 22 - Abacoa Community News - April '23

Page 22, Abacoa

Financial Focus Max Planck Florida Institute from page 21

Other schools competing in the 2023 Brain Bee Challenge
included:
Open The (Back) Door To A • Jupiter Middle School of Technology
• Suncoast Community High School
Roth IRA • American Heritage School
• Royal Palm Beach High School
By Sally Sima Stahl • West Boca High School
There aren’t many • Oxbridge Academy
drawbacks to having a high • FAU High School
income — but being unable In addition, one lucky school won a STEM kit valued at
to invest in a Roth IRA $1,000. This year’s raffle winner was Oxbridge Academy,
might be one of them. Are which received an Electrophysiology Class Bundle courtesy
there strategies that allow of the Mary and Robert Pew Public Education Fund. Dozens
high-income earners to of spectators turned out to cheer on the competitors in person
contribute to this valuable and via livestream.
retirement account? Trivia With A Purpose
Before we delve The MPFI Brain Bee Challenge is held each year to
into that question, let’s increase public awareness of the importance, progress, and
consider the rules. In 2023, you can contribute the benefits of brain research.
full amount to a Roth IRA — $6,500, or $7,500 if The Mary and Robert Pew Public Education Fund has
you’re 50 or older — if your modified adjusted gross supported the event since its inception in 2012. In the last
income is less than $138,000 (if you’re single) or 10 years, the Brain Bee Challenge has welcomed more than
$218,000 (if you’re married and filing jointly). If you 480 students in grades 8 to 12 to MPFI’s West Palm Beach
earn more than these amounts, the amount you can campus.
contribute decreases until it’s phased out completely Brain Bee Challenge participants tour the institute to learn
if your income exceeds $153,000 (single) or $228,000 about the organization’s microscopy
(married, filing jointly). facilities and mechanical workshops.
A Roth IRA is attractive because its earnings and Students also participate in hands-on
withdrawals are tax free, provided you’ve had the neuroscience demonstrations. The
account at least five years and you don’t start taking Brain Bee Challenge is part of a global
money out until you’re 59½. Furthermore, when campaign to increase public awareness
you own a Roth IRA, you’re not required to take of the importance, progress, and
withdrawals from it when you turn 72, as you would benefits of brain research.
with a traditional IRA, so you’ll have more flexibility Part of the prestigious Max
in your retirement income planning and your money Planck Society based in Germany,
will have the chance to potentially keep growing. But MPFI is its first and only institute
given your income, how can you contribute to a Roth? in North America. Situated in the
You may want to consider what’s known as a growing biosciences cluster in
“backdoor Roth” strategy. Essentially, this involves scenic Palm Beach County in South
contributing money to a new traditional IRA, or taking Florida, MPFI provides a vibrant,
money from an existing one, and then converting the collaborative environment where
funds to a Roth IRA. But while this backdoor strategy scientists are provided generous
sounds simple, it involves some serious considerations. ongoing support to conduct high
Specifically, you need to evaluate how much of impact research at the cutting edge.
your traditional IRA is in pretax or after-tax dollars.
When you contribute pretax dollars to a traditional
IRA, your contributions lower your annual taxable
income. However, if your income is high enough
to disqualify you from contributing directly to a
Roth IRA, you may also earn too much to make
deductible (pretax) contributions to a traditional IRA.
Consequently, you might have contributed after-tax
dollars to your traditional IRA, on top of the pretax
ones you may have put in when your income was lower.
(Earnings on after-tax contributions will be treated as
pretax amounts.)
In any case, if you convert pretax assets from your
traditional IRA to a Roth IRA, the amount converted
will be fully taxable in the year of the conversion.
So, if you were to convert a large amount of these
assets, you could face a hefty tax bill. And since you
probably don’t want to take funds from the converted
IRA itself to pay for the taxes, you’d need another
source of funding, possibly from your savings and
other investments.
Ultimately, then, a backdoor Roth IRA strategy
may make the most sense if you have few or no pretax
assets in any traditional IRA, including a SEP-IRA
and a SIMPLE IRA. If you do have a sizable amount
of pretax dollars in your IRA, and you’d still like to
convert it to a Roth IRA, you could consider spreading
the conversion over a period of years, potentially
diluting your tax burden.
Consult with your tax advisor when considering
a backdoor Roth strategy. But if it’s appropriate for
your situation, it could play a role in your financial
strategy, so give it some thought.
This article was written by Edward Jones for use by
your local Edward Jones Financial Advisor, Edward
Jones, Member SIPC.
Edward Jones is a licensed insurance producer
in all states and Washington, D.C., through Edward
D. Jones & Co., L.P., and in California, New Mexico
and Massachusetts through Edward Jones Insurance
Agency of California, L.L.C.; Edward Jones Insurance
Agency of New Mexico, L.L.C.; and Edward Jones
Insurance Agency of Massachusetts, L.L.C.
Edward Jones, its employees and financial advisors
cannot provide tax advice. You should consult your
qualified tax advisor regarding your situation.
Contact us at (561) 748-7600, Sally Sima Stahl, AAMS,
1851 W. Indiantown Road, Ste. 106, Jupiter, FL 33458.