The Backdoor Roth IRA is a Secret Loophole That Will Increase Your Wealth

The Backdoor Roth IRA is a Secret Loophole That Will Increase Your Wealth

#BackdoorRothIRA #Investing #Taxes
The Backdoor Roth IRA is a perfectly legal, IRS-sanctioned method for high income earners to convert their traditional IRA or tradtional 401k to a Roth IRA. I briefly touch on the biggest advantages and drawbacks when comparing a Roth IRA with a traditional IRA before delving into the reasons why someone would need to use a Backdoor Roth IRA. The IRS sets income limits on taxpayers that prevent higher income earners from contributing to a Roth IRA. The Backdoor Roth IRA get around the income limits by converting an existing traditional IRA to a Backdoor Roth IRA. I go over the steps to complete a conversion to a Backdoor Roth IRA including setting aside money to pay the taxes on contributions to your traditional IRA or 401k when converting to a backdoor Roth. I finish off by going over some of the rules and potential drawbacks of converting to a Backdoor Roth.

I hope you enjoy the video and find it informative. Please remember I’m not a financial advisor and this isn’t financial advice. Make sure you do your own research and consult a tax professional if you need further clarification.

IRA Deduction Tips: It is possible to avoid incurring fees when investing in stocks if you purchase directly through the company in question. Not all companies permit direct stock purchases, but those that do make it easy to avoid commissions that brokers charge. The downside is that investing in this manner makes it difficult or impossible for you to specify a buy price.

Time Stamps:
00:00 Intro
00:38 Why Choose a Roth IRA over a Traditional IRA?
03:11 Backdoor Roth IRA Explained
03:48 Why is a Backdoor Roth Necessary?
06:05 Steps to Complete Backdoor Roth Conversion
08:18 Additional Rules and Warnings

Written by Bobby

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