To Backdoor or not backdoor
i am currently maxing out my 401K and I earn less than the roth limits. i want to take advantage of Roth IRA (additional 6K contribution). What are the benefits of going the backdoor conversion route vs getting my full money in my paycheck and putting it into Vanguard Funds in a roth IRA. base: 100K, Low cost of living City Microsoft allows backdoor and uses Fidelity Age: 21
If you are eligible to do the Roth directly on benefit or harm. Consider doing 401k after tax to Roth as well
Whats the benefit of that vs getting my money in my paycheck and putting into a Roth IRA myself
You can put 6k on roth IRA and another 27.5k into after tax and convert it to roth 401k
Love the title. I was going to make an anal sex joke.....butt fuck it.
From my understanding it will be the same—the only possible risk I can think of is if you deposit into a Roth IRA directly and then your income unexpectedly increases later this year (raise or switching jobs) to the point where you’re above the income limit to contribute directly. Probably a small risk but safest to just do backdoor since it will be the same end result
When you say “Microsoft allows Backdoor” I think you are referring to Mega Backdoor Roth which is different from Backdoor Roth IRA. Clarify the definition from blogs like the Mad Fientist. At 21, mega Backdoor Roth sounds like an overkill but depends on your financial goal. Talk to a financial planner instead of asking Blind. Fidelity has great free financial consultation too.
Which Roth are you talking about? 401(k) or IRA?
Roth IRA