I am looking at opening a new non-deductible IRA and then converting it to a ROTH IRA. I must do this since my MAGI is too high for a direct ROTH contribution. I would like to do this to start the 5 year clock ticking so that I can rollover my employee sponsored ROTH into this new ROTH IRA when I retire so that it would be exempt from RMDs. However, as I already have a SEP plan I do not understand how the pro-rata tax consequences would apply. I only want to fund the ROTH IRA with a small amount for the express purpose of starting the clock. However, due to the pro-rata rules maybe this is not a good idea. Does anyone have an idea how this would work or if it is even worth the hassle?
