When I came up with the Unconventional Roth IRA Strategy to Lower Tax Bill I realized that to be successful I needed to track my Roth IRA money more closely. Once I dug a little deeper, I found that even if you are using the Roth IRA in a more traditional way, you still need to track your Roth IRA.

Why You Need to Track Your Roth IRA Contributions

Early Retirement. The typical age for a tax free withdrawal is after age 59.5. However, what if you retire earlier than that? I previously described How to Make Early Roth IRA Withdrawals which details exactly how that works.

Tax Treatment of Contributions and Conversions. In order to make the tax free withdrawals, one of the key components is knowing how much you’ve contributed, how much you’ve converted, and in which years. After 10 years of contributions… can you remember how much you put in each year?

It’s Not Captured on Your Tax Return. You might think that the information is on your tax return. After spending hours digging through the last ten years of tax returns, I found that the conversions are, but the contributions probably are not (unless you used it to claim the retirement savings credit).

Roth IRA Tracking Worksheet

Do your future self a favor and start tracking it. It’s really easy, I made a quick excel spreadsheet to get the job done:


Roth IRA Tracking – Get more Free Tax Forms

(The negative value for the 2008 conversion is because I had to recharacterize a prior conversion.)

Action Plan

You can download a copy of the spreadsheet and change the numbers to your own. Each year you complete your taxes, print off an updated copy and throw it in your tax folder.






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Comments to How to Track Your Roth IRA Contributions… and Why You Need To!

  1. Great tip, Madison. I will have to begin doing this.

    PT’s last post: How To Save Money Like A Madman

    PT

  2. After-tax savings/investments can be very powerful in pursuit of the early-early retirement !

    Todd A

  3. *Blinks*

    People don’t track their ROTH IRA contributions? How can you not, if you track things like net worth and your budget, etc? What am I missing?

    As for how to remember what I put in each year – it’s easy when you max it out! ;)

    deepali’s last post: september goals check-in: week 1

    deepali

  4. This is a great idea. And thanks for including the tracking spreadsheet. Saves me a couple minutes.

    Joe

  5. This is not something that I was aware I needed to do! I will have to look into figuring out how much I contributed!

    SavingDiva’s last post: MySurvey Checks

    SavingDiva

  6. Thanks, Madison, for sharing this worksheet! It is so simple, but will be so helpful for the future!!!

    Julie in Louisiana


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