Backdoor Roth Ira Vanguard Steps

Why perform a backdoor roth ira conversion.

Backdoor roth ira vanguard steps.

Step by step tutorial for first backdoor roth ira step 1. Head on over to the vanguard personal. If you haven t done so already you ll need to open a traditional ira. 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. 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. Backdoor roth tutorial steps. Here s how i make my backdoor roth conversion with vanguard.

First place your contribution in a traditional ira which has no income limits. 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. Make a non deductible ira contribution. 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. But make sure you understand the tax consequences before using this strategy. Fidelity and vanguard are one of the more popular choices. Talking about it is pretty easy but i wanted to show you what it should look like through fidelity.

Contribute 5 500 to your ira account after you have your ira setup the next step is to add some funds to it. Open a vanguard ira and roth ira account in order to do a backdoor roth conversion you ll need both a traditional. You can use the same traditional ira accounts every year they just spend most of the time with 0 in it.