Backdoor Roth Ira Vanguard Steps

Fidelity and vanguard are one of the more popular choices.

Backdoor roth ira vanguard steps.

If you haven t done so already you ll need to open a traditional ira. Open a vanguard ira and roth ira account in order to do a backdoor roth conversion you ll need both a traditional. 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. 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.

But make sure you understand the tax consequences before using this strategy. You can use the same traditional ira accounts every year they just spend most of the time with 0 in it. Convert to roth mutual fund account. 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.

In vanguard i contributed 6k for me to a traditional ira for 2019 step one of the back door. Talking about it is pretty easy but i wanted to show you what it should look like through fidelity. Make a non deductible ira contribution. Why perform a backdoor roth ira conversion.

Backdoor roth tutorial steps. 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. The conversion would be part of a 2 step process often referred to as a backdoor strategy. Here s how i make my backdoor roth conversion with vanguard.

Navigate to vanguard website the first step is the most intuitive. Head on over to the vanguard personal. Step by step tutorial for first backdoor roth ira step 1.