Where to setup a backdoor Roth? And post-tax 401k rollovers

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Where to setup a backdoor Roth? And post-tax 401k rollovers

Postby batpot » Fri Jul 26, 2013 11:45 pm

First question:
What's the best place to setup a backdoor Roth? Where can I keep a traditional IRA with zero balance w/out an annual "low balance" fee? Or should I instead open, rollover, then close the traditional IRA once a year when I make my out of pocket contribution?

Later this year, I also expect to start contributing post-tax dollars to my 401k, which I'd like to immediately rollover to the Roth. If I'm understanding Pub 590, I should be able to directly roll these into the Roth. Is that correct?

Thanks for the feedback.
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Re: Where to setup a backdoor Roth? And post-tax 401k rollov

Postby Duckie » Sat Jul 27, 2013 10:02 pm

batpot wrote:What's the best place to setup a backdoor Roth? Where can I keep a traditional IRA with zero balance w/out an annual "low balance" fee? Or should I instead open, rollover, then close the traditional IRA once a year when I make my out of pocket contribution?

At Vanguard (and I assume at other fund companies) you can open a TIRA, fund it, and convert it to a Roth IRA leaving the TIRA account open with a zero balance. There are no "low balance" fees. Eventually Vanguard will close the empty account but not for awhile. It'll probably still be available the next year when you want to do the process again. If not, just open a new one.
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