The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: reformingSucka on June 01, 2019, 06:26:34 AM
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Details for 2019:
Single
Phased out of Roth IRA contributions.
I contribute to an employer sponsored 401k plan. (Max)
I do NOT have any kind of existing IRA account. (I plan to open one, once I figure the logistics of Back door Roth out)
I do have a Vanguard Roth IRA account. (Open)
After doing a little research, here’s what I’ve come up with as my next steps:
1. Open up a traditional IRA account. (Planning to open account with Vanguard)
2. Put non-deductible money in new vanguard IRA account.
3. Convert traditional IRA to Roth IRA, in a day or so. (Choose appropriate investment, so that money put into IRA is not subject to losses/ gains while waiting to be converted)
Am I missing something? Or is it that simple given that I don’t have an existing IRA account? And all of the money going into my Roth will be non-deductible income.
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You've got it.
The logistics of a backdoor Roth are pretty easy. The harder part is understanding why you would need to do it and why it can backfire if you already have a pre-tax IRA. You've done your homework, you understand the why, now you just need to hit some buttons. ;-)