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I thought the prevailing wisdom was that the target retirement funds weren't so hot. Looking at Vanguard's, the 2045 retirement fund has 10+% of its assets in bonds. Isn't that a bit conservative? At least the expense ratio is low, and it is essentially just like putting 70+% of your money into an index fund, but I can't help thinking there are better options.
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Sep 24, 2008 17:45
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| # ¿ May 4, 2024 09:03 |
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Dick Nipples posted:So I've decided late I want to do the Backdoor Roth for 2017. Does anyone know of a guide/wiki/site that covers what sorta things I need to pay attention to when filing my taxes for 2017? I checked the OP but it didn't explicitly mention it. File form 8606. It's pretty simple -- part 1 covers the nondeductible contribution and part 2 covers the rollover.
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Mar 7, 2018 21:23
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Minty Swagger posted:I have an IRA with a sizeable 5 figure amount in it that I could roll into my 401k (so i dont get taxed) which should enable the backdoor roth for me in 2018, but sadly I cant do the "MEGA BACKDOOR ROTH" due to it being discriminatory, at least according to finance and HR at my company. You should definitely do this rollover if your company allows IRA --> 401k transfers (some don't). Just remember your form 8602 reflects IRA balances on Dec 31, so you need to complete the rollover by then. Don't put it off till January and then do the contribution before the tax day deadline or you will get bent over.
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Apr 13, 2018 17:26
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I had a signing bonus that was paid out over two years. Starting April 2017 I invested the same amount in Betterment every other Monday -- 66 equal deposits. I don't even remember why I picked them over buying VTSAX. Betterment just added a cool new comparison so I can see how much I lost by using them vs. investing in index funds, right on their site. So useful! Annualized, that's 7.6% vs. 12.1% return. Maybe I'll stop now.
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Oct 17, 2019 05:28
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I've linked this before but this guy has screenshots of the entire process: https://thephysicianphilosopher.com/first-backdoor-roth-on-vanguard/
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Nov 15, 2019 20:35
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KillHour posted:This backdoor stuff is what always scared me off of opening an IRA. Is there an idiot's primer to doing this properly? Linking this again. Actual process at Vanguard, step by step: https://www.physicianonfire.com/backdoor/ As for rules: ensure you don't have any Trad IRAs. Jows posted:Say I have $130k in a Trad IRA that was a rollover from a Trad 401k from an old job. I executed the rollover in 2011. I've also changed funds a few times. I can dig up my closed positions to find my original cost basis for the IRA, but I have no clue what portion of that original rollover was from my salary deferral and what was put in by my company (profit sharing, safe harbor, and match). You can run through the math on form 8606. It won't be pretty. See if your 401k allows in-service rollovers -- I was able to roll my trad IRA into my active 401k.
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Feb 27, 2020 19:46
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Jows posted:I'll check out the form. Thanks. My active 401k is a Roth (trad for company match and ESOP contributions though), so I don't know if that would work. Maybe if it is offered they could roll it into the trad part? They likely could. My previous small company using ADP 401k allowed "reverse rollovers" (just realized I used the wrong terminology before) but some of the FAANGs do not.
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Feb 28, 2020 21:17
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MJP posted:I've already got something like $78k+ in the trad (at least before stonks tanked, I have been avoiding Personal Capital for sanity lately). I'm converting it over at $5k/year to not have a giant amount of taxes to pay on it, at my accountant's advice. If you're eligible for a 401k see if it allows reverse rollovers -- about half do. You can just dump the trad IRA into the 401k, wait a cal year, and start doing the backdoor roth.
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Mar 25, 2020 23:51
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MJP posted:I'm utterly lost. I thought I was supposed to be putting the trad IRA into the 401k and then next year start contributing to the Roth from the 401k? It's a multi part issue. You can contribute $6k to a roth IRA at any income level. if you're over a certain income level, you do what's known as a backdoor contribution. If you need to do a backdoor contribution, they don't work if you have trad IRA balances. If you need to use the backdoor method, you want to get rid of your trad IRA. You can get rid of your trad IRA two ways: 1) convert to a roth and pay taxes on money converted. Sounds like you're doing this over time. It's questionable if there's a benefit to doing it in small chunks if you can afford it -- I mean, you wouldn't want to go into the next marginal tax bracket here, but otherwise you can go as fast as you can afford. 2) reverse rollover to a 401k if your plan allows it. What I suggested instead as it's quicker and no tax implications.
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Mar 26, 2020 20:17
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| # ¿ May 4, 2024 09:03 |
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MJP posted:Okay so given my trad IRA balance, I think I might have sort of an idea on how to backdoor Roth? I don't think there's any need to wait a year. If you were to get rid of your traditional IRA by reverse rollover , you couldn't backdoor for 2019 because form 8606 asks for the balances of your trad IRAs as of Dec 31 2019 and that's already happened. You could backdoor for 2020, though, as long as you got rid of the trad IRA balance by Dec 31 2020. But the entire sequence I just described is to avoid paying tax on the balance of your trad IRA -- and you're already paying taxes by converting it to Roth. I can't think of a reason, then, that you couldn't still backdoor for 2019 between now and April 15, and you can definitely backdoor for 2020. Sorry, this stuff is stupidly convoluted.
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Mar 28, 2020 02:37
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