The money you contribute to a Roth IRA is yours. No matter how much you earn in the future, the money you already have in the account will continue to be invested with the goal of becoming savings for your future self. If you contributed to a Roth when you earned too much to qualify, or if you contributed more than allowed to any of the IRAs, you have made an excess contribution. These are your options if you contributed to a Roth IRA and then found that you weren't eligible to receive the contributions because you made too much money in the year of the contribution.
One option is to consider a Physical Gold IRA rollover, which allows you to transfer your excess contributions into a gold-backed retirement account. In other words, transfer the money from the Roth to a traditional IRA and call it a contribution to the traditional IRA instead of the Roth of the year. If you don't meet the requirements to accept a qualified distribution of your IRA to correct the error, you'll pay an additional 10% early withdrawal penalty on earnings (interest). However, if you have a traditional IRA that you have funded with deductible contributions, the tax benefit will be reduced and calculating your taxes will become more complicated. The biggest drawback is that any profit would be taxed as income and would also be subject to an early withdrawal penalty of 10% if you are under 59 and a half years old, making this option not highly recommended.
If you fall below the phase-out threshold, you can contribute the maximum amount for that year, as long as you have earned at least an equal amount of taxable income. Your modified adjusted gross income is the number that the IRS uses to determine your eligibility to make annual contributions to a Roth IRA. When your income is in the phase-out range, you can use the IRS worksheet to calculate the amount of your reduced contribution. If you have one or more IRAs that you've funded with deductible contributions, even the clandestine strategy can't stop you from owing taxes for a conversion to Roth.
In addition, you won't be allowed to deduct excess contributions from your income as you normally would with traditional IRA contributions. If you or your spouse participate in a traditional qualified retirement plan at work that accepts the renewal of pre-tax (deductible) IRA balances, then you have another way to avoid taxes if you use the clandestine strategy to fund a Roth. If you contribute too much to an IRA, you'll pay a 6% penalty on the amount that exceeds the allowable limit. And while it shouldn't be the only investment vehicle, it can provide additional benefits if used in conjunction with more traditional ones, such as a Roth IRA.
It's still feasible, but in the meantime, you'll need to be prepared to pay income taxes on any increase in money spent. You can have several IRAs that are funded partly by deductible contributions and partly by non-deductible contributions.
