WCI #194: The Backdoor Roth IRA Made Easy

4 snips

Jan 21, 2021

Discover the ins and outs of the backdoor Roth IRA, a crucial strategy for high earners to secure their retirement savings. Learn how to successfully navigate the process and rectify common errors. The discussion expands to asset class diversification and the tax implications of inherited money. Strategies for financial literacy aimed at medical and dental students are highlighted, along with tips on managing loans and investment planning. Dive into the emotional and financial factors of homeownership versus renting, and explore smart financial moves after residency.

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ANECDOTE

New Book And Student Giveaway

James Dahle released a new book for medical and dental students.
He plans to give copies to first-year classes via volunteer champions.

ADVICE

Backdoor Roth Two-Step Process

Do a nondeductible traditional IRA contribution then convert it to a Roth.
Keep the steps separate because contribution rules and conversion rules differ.

ADVICE

Keep Contributions In Cash First

Put your traditional IRA contribution into cash or a settlement fund before converting.
This avoids gains or losses that complicate taxes during conversion.

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Everyone should be contributing to a Roth IRA every year. This is retirement account space that you can't get back. Many of us need to contribute to the Roth IRA through the backdoor, which can be confusing. In this episode we discuss what a backdoor Roth IRA is, steps for successfully contributing to a backdoor Roth IRA, and how to fix errors that occur in each step. See full show notes here whitecoatinvestor.com/the-backdoor-roth-ira-made-easy-podcast-194. For those who have mastered the backdoor Roth IRA we also answer listener questions about adding new asset classes to your investment plan, tax implications for inherited money, helping parents with financial advice, behavioral and math components to personal finance, legal issues concerning being recorded at work, and recharacterizing contributions you have made to your retirement accounts. If you have not done your Roth IRA contribution yet this year, let this episode be the motivation to get it done.

Love what you hear on the podcast? Looking for more great White Coat Investor content? Head over to our YouTube channel where you can watch video recordings of our podcast, short snippets of financial tips explained succinctly by me and others, and deep dives into topics for more in depth learning. You can even learn all about real estate with webinars from our real estate partners. Check out all this and more at https://www.youtube.com/thewhitecoatinvestor. You can do this and The White Coat Investor can help.

The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor is for you!

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