How do you do a "backdoor" roth?

[goldsummer]

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So... I understand that I would not be eligible for a "regular" roth due to my income, but there is a such things as a backdoor roth.

How does one start a backdoor roth and contribute to it, and are there any limits or penalties associated with it?

 

[Chemist0157]

You put money into a traditional IRA then just move it over to a Roth. $6k limit annually.

 

[mvenus929]

WCI explains in detail how to do it with Vanguard, but I assume it works similarly at other companies: Backdoor IRA Vanguard Tutorial [With Screenshots] | White Coat Investor

 

[FutureInternist]

So... I understand that I would not be eligible for a "regular" roth due to my income, but there is a such things as a backdoor roth.

How does one start a backdoor roth and contribute to it, and are there any limits or penalties associated with it?

Use the search function, Luke.

 

[cincincyreds]

So... I understand that I would not be eligible for a "regular" roth due to my income, but there is a such things as a backdoor roth.

How does one start a backdoor roth and contribute to it, and are there any limits or penalties associated with it?

Very easy to do with fidelity. If you call them they will walk you through it. Basically you open up a nondeductible tradional ira with $6000. Once the funds clear which takes a few days there is a button that you can convert this traditional ira into a roth ira. The onlyl tax you pay is on the gains for the few days the money is in the traditiona ira. Again if you call fidelity they can walk you thru it.

 

[FutureInternist]

Very easy to do with fidelity. If you call them they will walk you through it. Basically you open up a nondeductible tradional ira with $6000. Once the funds clear which takes a few days there is a button that you can convert this traditional ira into a roth ira. The onlyl tax you pay is on the gains for the few days the money is in the traditiona ira. Again if you call fidelity they can walk you thru it.

Would suggest to do first step on a Fri and then can move to Roth IRA on Mon.

Cos even the $0.01 gain you may make requires a separate for to fill out.

Perhaps not a big deal if you lump sum $6000 but if you spread it out each month then those forma get cumbersome