Backdoor Roth Ira Vanguard Steps

If you haven t done so already you ll need to open a traditional ira.

Backdoor roth ira vanguard steps.

Why perform a backdoor roth ira conversion. The conversion would be part of a 2 step process often referred to as a backdoor strategy. Navigate to vanguard website the first step is the most intuitive. Convert to roth mutual fund account.

Contribute 5 500 to your ira account after you have your ira setup the next step is to add some funds to it. Head on over to the vanguard personal. 5 steps to making the backdoor roth ira contribution step 1 contribute to your traditional ira make a 6000 7000 if over 50 non deductible traditional ira contribution for yourself and one for your spouse. In vanguard i contributed 6k for me to a traditional ira for 2019 step one of the back door.

Make a non deductible ira contribution. 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. You can use the same traditional ira accounts every year they just spend most of the time with 0 in it. But make sure you understand the tax consequences before using this strategy.

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. Backdoor roth tutorial steps. Fidelity and vanguard are one of the more popular choices. Then move the money into a roth ira using a roth conversion.

Here s how i make my backdoor roth conversion with vanguard. 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. Talking about it is pretty easy but i wanted to show you what it should look like through fidelity.