Backdoor Roth Ira Vanguard Steps

Step by step tutorial for first backdoor roth ira step 1.

Backdoor roth ira vanguard steps.

Open a vanguard ira and roth ira account in order to do a backdoor roth conversion you ll need both a traditional. Fidelity and vanguard are one of the more popular choices. If you haven t done so already you ll need to open a traditional ira. Backdoor roth tutorial steps.

Talking about it is pretty easy but i wanted to show you what it should look like through fidelity. Here s how i make my backdoor roth conversion with vanguard. Head on over to the vanguard personal. Navigate to vanguard website the first step is the most intuitive.

You can use the same traditional ira accounts every year they just spend most of the time with 0 in it. In vanguard i contributed 6k for me to a traditional ira for 2019 step one of the back door. But make sure you understand the tax consequences before using this strategy. A backdoor roth can be created by first contributing to a traditional ira and then immediately converting it to a roth ira to avoid paying taxes on any earnings or having earnings that put you.

First place your contribution in a traditional ira which has no income limits. The conversion would be part of a 2 step process often referred to as a backdoor strategy. Then move the money into a roth ira using a roth conversion. I just went back and looked at my 2019 taxes and realized my magi is actually just under the limits allowed to contribute directly to a roth ira under any phase out amount.

Why perform a backdoor roth ira conversion. Make a non deductible ira contribution. To begin this backdoor roth tutorial first off you need to open a traditional ira and roth account with whatever mutual fund company you have.