traditional ira pro-rata dilemma

Background

  • 24yo living in IL (moving to NY soon)
  • Income ~300k/yr (expected to be >250k/yr for next ~25yrs
  • Traditional IRA balance: ~$115k (~$15k basis / pre-tax contributions; rest earnings).

Issue: I’ve just realized my trad IRA balance creates a pro-rata problem for backdoor roth IRA contributions. If I make a non-deductible ira contribution and do a roth conversion, most of the conversion would be taxable because of that (proportionally large) existing pre-tax Traditional IRA balance.

My options are:

  1. Convert the entire Traditional IRA to Roth now, likely creating about ~$100k of taxable income (so I’ll owe 35-40k in taxes)
  2. Do partial Roth conversions over several years (probably is dominated by option 1).
  3. Stop doing backdoor Roth ira contributions/conversions and just invest in a taxable brokerage.

*Namely, anything with a 401k is not an option*

TL;DR: Young earner (expect to earn >250k/yr for next ~25years). Contributed to Trad IRA previously, grew that money… Now realize that I should’ve done a Roth IRA instead. Deciding between just contributing to a taxable account versus doing a roth conversion right now.

Posted Apr 24, 2026, 8:24 PM UTC

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