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Do you basically get double taxed if you make non deductable contributions to a traditional ira? Why do it? (self.personalfinance)

submitted 1 year ago by aredditimmigrant to c/[email protected]

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In the US, if you make a lot, are covered by a work retirement account or you contribute to a Roth, you can't deduct traditional ira contributions right?

So that money gets added to the rest of your traditional ira monies right? and then when you hit retirement age, you have to pay income level taxes on deductions on that already post tax money right?

Why get taxed twice? What's the benefit? +Not being able to touch it til retirement age.

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[–] [email protected] 4 points 1 year ago

As I understand it, the interest income is tax deferred while it is still in the IRA. So over a long period it can appreciate a lot more than if taxes were being taken out every year.