Backdoor Roth Ira Vanguard Steps

Head on over to the vanguard personal.

Backdoor roth ira vanguard steps.

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. If you haven t done so already you ll need to open a traditional ira. 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. 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. Make a non deductible ira contribution. Then move the money into a roth ira using a roth conversion. Backdoor roth tutorial steps.

Why perform a backdoor roth ira 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. 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.

First place your contribution in a traditional ira which has no income limits. Navigate to vanguard website the first step is the most intuitive. Here s how i make my backdoor roth conversion with vanguard. But make sure you understand the tax consequences before using this strategy.

The conversion would be part of a 2 step process often referred to as a backdoor strategy. Talking about it is pretty easy but i wanted to show you what it should look like through fidelity. 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.