No, there is no maximum income limit for a traditional IRA or an IRA Gold account. Anyone can contribute to either type of IRA. While a Roth IRA has a strict income limit and people with incomes above it can't contribute at all, that rule doesn't apply to a traditional IRA or an IRA Gold account. If a person with a high income decides to make a contribution to an IRA, the contribution cannot be made to a Roth IRA, but they can still make a contribution to an IRA Gold account. Instead, it should be done to a traditional IRA.
Let's suppose that, in the situation of this person who earns, the contribution is not tax-deductible. Once the funds are in the IRA, they will grow tax-deferred until they are withdrawn. At the time of withdrawal, if the IRA has gained value, part of the distribution will be a tax-free tax return and the rest will be taxed at the beneficiary's current income tax rate. You save the most if you don't have pre-existing traditional IRA balances that need to be included in your tax bill or if your employer's qualified plan allows the renewal of deductible IRA balances.
If your income is above the traditional IRA limit, but below the Roth IRA limit, this is a great option. Your actions and circumstances are identical to those of the first situation, except that you also have a traditional IRA reinvestment account that was fully funded by deductible contributions. With a clandestine Roth IRA, a person makes a non-deductible contribution to a traditional IRA and then converts that account into a Roth IRA. Some advisors also consider the so-called clandestine Roth IRA to be another way of guaranteeing the tax features offered by Roth accounts.
If you can't contribute to a Roth IRA because your income is above that limit, you still have the option of contributing to a traditional, non-deductible IRA. A clandestine Roth IRA is not a type of retirement account, but rather a strategy for converting funds from a traditional IRA or 401 (k) into a Roth IRA. What you'll need to do is open a traditional non-deductible IRA account and then immediately transfer it to a Roth IRA. However, if your traditional IRA is primarily comprised of pre-tax contributions, it may not make sense to convert it to a Roth IRA if you incur a large tax liability.
It's true that this maneuver can convert a non-deductible contribution to a traditional IRA into money into a forever tax-exempt Roth IRA, but conversion taxes will be calculated based on all assets in the pre-tax IRAs (such as a traditional IRA or an accumulated IRA). As of last year, there are no income restrictions on converting your traditional IRA to a Roth IRA. Under the prorated rule, IRA account conversions are taxed in proportion to the amount of taxable contributions from all of your IRA balances.
