Backdoor Roth IRA (HOW TO DO IT IN 3 STEPS)

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BACKDOOR ROTH IRA // Do you make too much to qualify for Roth contributions? You can still get the awesome tax savings via a BACKDOOR Roth IRA! Watch this video for a step-by-step tutorial on how to do a backdoor Roth IRA (on Fidelity), for background info on why the backdoor Roth IRA is legal, and some common pitfalls to look out for so you don't accidentally trigger a huge tax bill! Backdoor Roth IRA explained, using Fidelity as my example. It involves doing a Fidelity Roth conversion but keeping in mind certain important steps.

*⏱️ TIMESTAMPS*
* 00:00 – Intro
* 01:09 – How it works
* 01:59 – Steps
* 07:16 – Pitfalls

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*⚠️ DISCLAIMERS & DISCLOSURES*
This content is for education and entertainment purposes only. Rose does not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.

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@itsrosehan is my social media handle on all platforms. I will NEVER message or email you about investment schemes, so please be careful and block & report any scammers posing as me.

[itsrosehan]

I wrote this for YOU... the guide I wish I'd had when I was starting my financial journey. To freedom! 🚐 💸

[arlingtontime]

Finally a channel that is easy to understand about personal finance. Thanks Rose. Maxing out my 401k & ROTH IRA

[tinyearthcreations]

Thank you so much! You’re the only person offering financial advice that actually shows step by step process.

[shivaamrit]

I have never commented on any social media platform ever before, no matter how good I found their content. But I just couldn't stop myself from putting a congratulatory comment here. Your channel is hands down one of the best out here. Congrats on delivering such high quality content consistently. Also, don't stop :)

[wnsmuwc]

using earbuds and for a moment thought that my right one is broken LOL, great video though, thank you so much for uploading them!

[jlshoem]

As an old guy, you can contribute up to $7, 000 to my Roth. What I didn't realize is that you can convert portions of your Traditional IRA after you have contributed the cash. In a Fidelity account, you can easily do this. Also, you can transfer shares of stocks, mutual funds, or ETFs from your IRA to your Roth. When you do this, you will be given the option to have taxes withheld, or not. If you are confused in any way, call Fidelity. Their support people are extremely good. And, if you wish, they will hold your hand while you conduct a transaction.

[osdevisnot]

Hands down the best video and best channel. I wish Rose makes a similar video for MegaBackdoor Roth.

[dcinkc]

You make no mention of the 5-year required holding period for each Roth conversion purchase. That is a big pitfall for your viewers to be aware of. This information is available in IRS Pub 590.B.

[MrRKWRIGHT]

Good Friday morning Rose. Excellent video with superb production values. Yor financial and planning skills are absolutely impeccable. TYFS and have a wonderful weekend.

[Lewispirit]

Hi Rose!
Does transfer money from your own bank > traditional ira > roth ira really work? I thought the requirement of backdoor roth ira is your employer has to support after-tax contribution and also in-service distributions. And then you have to do that through your employer's retirement financial provider instead of what the video shows.

If you follow the video, you'll pay tax twice. First, the money in your own bank is after tax (pay 1st time) and then pay the 2nd time when converting to roth ira. That's why you need to do this through your employer's retirement financial provider to avoid paying tax twice.

[einfussganger]

8:49 "I don't even know how that would work. You'd probably have to report some extra things and maybe pay something." This is some fine financial advice.

[saibushayer]

@9:55 She dropped the f-bomb and didn't edit it out. I've never had so much respect for a financial YouTuber in my life Lol

[vandocr]

thank you for making this video Rose. As I'm reading "Quit like a Millionaire", chapter 12 and 13 was a bit confusing for me. Thank you for explaining the tax loop-hole.

[verynick]

9:55 lol don’t efff up the 8606 form!!!

[jdg]

Overall, this is a good explanation. One thing to keep in mind though is the “step-transaction doctrine”. If you convert the Traditional IRA immediately, this can be considered a single integrated event. The IRS and Tax courts can levy fines or reverse your contribution entirely. To avoid this, you’re better leaving your Traditional IRA contribution alone for a few weeks before converting to the ROTH IRA.

- Jack G., CFP

[VAMP]

This is the type of financial advice content we need. Subscribed!

[esscco]

Great video. I do have one question though: If I transfer $6k of savings into my Trad IRA prior to the 4/15 tax filing deadline and designate it as a contribution for the prior year and then another $6k as a contribution for the current year, can I then backdoor the entire $12k into my Roth? Or am I only allowed to backdoor $6K per year?

[tho]

Had to rewind and listen again when I heard her drop the F- bomb. LOL 😂

[DaveBandfanMatthews]

This video is great! Thank you for your in-depth explanations! One question I have is can you perform a rollover from a traditional IRA to a roth IRA multiple times in one year?

[soundtreks]

great video. Also rocking the glasses! very nice look Rose! 🔥