I read articles online and all said having an IRA is good. But I dont get it. If there is no Tax advantage what's so good about it
The tax advantages are 1 It lowers your taxable income so you pay less taxes today/now 2 you don't pay taxes on the interest in your 401k until you take it out. By that time you will most likely be in a lower tax bracket than you are today.
Can someone explain to me how the backdoor 401k works?
There is no backdoor 401k. You are allowed to contribute to a Non-deductible IRA which can then be converted into a Roth IRA. There are rules related to the conversion so you will need some qualified advice (from an accountant)
Assuming you mean mega backdoor IRA, it's when you contribute after tax money to 401k and then convert to either Roth 401k or Roth IRA
Note that there's a maximum income for roth IRA and most of us are above it, and that you can't contribute to IRA if you maxed out 401k.
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The gain is tax free. Looks like a tiny bit of money right now but in the long run very good
I see, good points but I assume there is no need to rush open one for 4/17
The rush is there is a limit on how much you can contribute. You can add 5500 to a Roth a year but you already missed the backdoor deadline. 5500 tax free for decades becomes significant. Highly recommend you take advantage of tax loopholes!