How to do a backdoor Roth in less than 30 seconds? Hey, it's Jon from Financial MD, welcome to today's Didactic Minute.
Now, I can't tell you how to do a backdoor Roth in less than 30 seconds but the time that it's going to take for me to tell you how is going to take less than 30 seconds and I'm actually going to tell you why and what it is.
So a backdoor Roth is being able to do a Roth IRA even if you make too much. The income limits for Roth IRA are over $200,000 for a couple of married filing jointly. And so for most of you physicians out there when you go into practice, you can't do a Roth IRA anymore and so you have to do a backdoor Roth which means you open a traditional IRA, you put money in there – a non-deductible contribution – then you do a Roth conversion and convert it to the Roth IRA. So you go to Vanguard or Schwab or wherever you want to go. You open up a regular IRA. You open up a Roth. You schedule a monthly non-deductible contribution to the traditional IRA and then you transfer to Roth whenever you want to and there you go.