Change the name of the "Backdoor Roth" to something else?

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neurosphere
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Change the name of the "Backdoor Roth" to something else?

Post by neurosphere »

HI all, many people on this site have noted that the term Backdoor Roth is somewhat unfortunate because it implies the method is somehow underhanded or poorly established.

In my financial presentations I have started to refer to Roth IRAs as "Direct Roth IRA" (or "conventional Roth") and "Indirect or 2-Step Roth" IRAs. I then mention that the income limits only apply a Roth funded by the direct method, and not to Roths funded by indirect methods. Of course there are additional considerations to take into account in terms of the "Indirect" Roth.

My question is, does anything think it would be helpful or useful to begin referring to backdoor Roths as something else? E.g. "You may want to consider funding a Roth through the indirect pathway, formerly known as a Backdoor Roth." Or is the term backdoor Roth already so firmly entrenched that such an initiative would not catch on?
sscritic
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

I have used variations involving the term two-step or two step (I am inconsistent on my use of the hyphen).
A backdoor Roth is really the tIRA-Roth two step
The IRS uses words like contribution and conversion, but I can't find backdoor in pub 590.
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White Coat Investor
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Re: Change the name of the "Backdoor Roth" to something else

Post by White Coat Investor »

I credit Harry Sit (The Finance Buff) with the coining of the "Backdoor" term, although perhaps incorrectly. Bloggers like Harry, myself, Mike Piper, and this forum are responsible for popularizing it. However, over the last 2 or 3 years, I'm seeing it used in the mainstream media (Forbes, Market Watch, WSJ) more and more.

Good luck changing it.
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YttriumNitrate
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Re: Change the name of the "Backdoor Roth" to something else

Post by YttriumNitrate »

I like the name, primarily because my inner 12 year-old snickers every time someone uses the term backdoor...
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Re: Change the name of the "Backdoor Roth" to something else

Post by barnaclebob »

No need to confuse people with "direct Roth IRA", if you want to use indirect instead of backdoor then go for it.
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vectorizer
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Re: Change the name of the "Backdoor Roth" to something else

Post by vectorizer »

Agree that the term is unfortunate. Equally unfortunate is that it's too late to change it, and using a different term will only confuse those who have already heard the original term.
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Re: Change the name of the "Backdoor Roth" to something else

Post by jimb_fromATL »

It is a little strange-sounding, but "loophole that the feds probably didn't think about and will probably close one of these days" doesn't roll off the tongue as easily, and is a lot harder to type.

jimb
sscritic
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

The con-con Roth (contribution-conversion). Does con-con roll for you?
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Re: Change the name of the "Backdoor Roth" to something else

Post by an_asker »

neurosphere wrote:HI all, many people on this site have noted that the term Backdoor Roth is somewhat unfortunate because it implies the method is somehow underhanded or poorly established.

In my financial presentations I have started to refer to Roth IRAs as "Direct Roth IRA" (or "conventional Roth") and "Indirect or 2-Step Roth" IRAs. I then mention that the income limits only apply a Roth funded by the direct method, and not to Roths funded by indirect methods. Of course there are additional considerations to take into account in terms of the "Indirect" Roth.

My question is, does anything think it would be helpful or useful to begin referring to backdoor Roths as something else? E.g. "You may want to consider funding a Roth through the indirect pathway, formerly known as a Backdoor Roth." Or is the term backdoor Roth already so firmly entrenched that such an initiative would not catch on?
How about "Window Roth"? Quote from Sound of Music ...
When the Lord closes a door, somewhere He opens a window.
Of course, the Mac/Linux lobby will protest :oops:
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PaulD
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Re: Change the name of the "Backdoor Roth" to something else

Post by PaulD »

Why deprive people of the natural appeal of feeling like they are getting over on the IRS? Seems like it would be a strong selling point to suggest that it's a sneaky-trick-loophole.
Best of Luck on Your Financial Journey!
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

EmergDoc wrote:I credit Harry Sit (The Finance Buff) with the coining of the "Backdoor" term, although perhaps incorrectly. Bloggers like Harry, myself, Mike Piper, and this forum are responsible for popularizing it. However, over the last 2 or 3 years, I'm seeing it used in the mainstream media (Forbes, Market Watch, WSJ) more and more.

Good luck changing it.
WCInvestor has 528 followers on twitter.
Katy Perry has 52,595,135 followers on twitter.

When Katy Perry tweets about her backdoor Roth, then the term will be mainstream.
island
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Re: Change the name of the "Backdoor Roth" to something else

Post by island »

Appears to be used widely. Saw it on many sites before I discovered this one. I see no reason to muddy the waters by calling it something else. Just semantics.
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fundtalker123
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Re: Change the name of the "Backdoor Roth" to something else

Post by fundtalker123 »

I think it is possible that some lawmakers read some online discussion forums. I do not like the idea that if they read about something described using language which incorrectly suggests some trick being pulled, as opposed to simply describing a perfectly legal, logical, and (one can only assume) intended means for retirement savings for members of the public, they might incorrectly decide that some laws need changing. Therefore I do not like at all the use of such a term.
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celia
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Re: Change the name of the "Backdoor Roth" to something else

Post by celia »

The problem with coming up with your own terminology is that the people you explain it to will not know how it refers to the backdoor Roth. They will come here in a year and start asking questions about the indirect Roth IRA. How it is different from the 2-step Roth IRA? How is it different from the backdoor Roth IRA?

The people already here who will answer their questions will start by asking if they mean backdoor. So you might as well use the commonly-used terminology, unless you are keeping them away from news sources, publications, forums, friends and co-workers.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
Iorek
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Re: Change the name of the "Backdoor Roth" to something else

Post by Iorek »

fundtalker123 wrote:I think it is possible that some lawmakers read some online discussion forums. I do not like the idea that if they read about something described using language which incorrectly suggests some trick being pulled, as opposed to simply describing a perfectly legal, logical, and (one can only assume) intended means for retirement savings for members of the public, they might incorrectly decide that some laws need changing. Therefore I do not like at all the use of such a term.
I will concede it is legal, but it is hardly logical, and I think assuming it was intended gives far too much credit to Congress. Frankly the situation right now is just silly-- Congress should either lift the contribution limit or end the backdoor Roth (and I know which one I'd do), but given that Congress seems incapable of doing anything right now I hardly think a discussion on this forum is going to matter much one way or the other.
gerrym51
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Re: Change the name of the "Backdoor Roth" to something else

Post by gerrym51 »

I think "CLYDE" would be a terrific name :mrgreen:
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Re: Change the name of the "Backdoor Roth" to something else

Post by surfstar »

I vote we go with the theme of combing names from celebrity couples and call it the BRoth.
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Re: Change the name of the "Backdoor Roth" to something else

Post by tfb »

EmergDoc wrote:I credit Harry Sit (The Finance Buff) with the coining of the "Backdoor" term, although perhaps incorrectly.
Really? I should've trademarked it then. :) Even Vanguard used it. https://personal.vanguard.com/us/insigh ... /2505-Exc2

I still see it as an unintended consequence which can't be fixed without new legislation. It's not illegal but it's not something they promote either. It's in the same camp as using HSA as a stealth IRA, file-and-suspend, deduct-and-convert, 529 pass-through, and a number of other not-as-intended maneuvers.
Harry Sit has left the forums.
dhodson
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Re: Change the name of the "Backdoor Roth" to something else

Post by dhodson »

The Roth formerly know as back door Roth ....
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Re: Change the name of the "Backdoor Roth" to something else

Post by placeholder »

sscritic wrote:When Katy Perry tweets about her backdoor Roth, then the term will be mainstream.
Not to mention how excited some of her pervier fans would get.
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

placeholder wrote:
sscritic wrote:When Katy Perry tweets about her backdoor Roth, then the term will be mainstream.
Not to mention how excited some of her pervier fans would get.
I am excited already! :)
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Re: Change the name of the "Backdoor Roth" to something else

Post by HueyLD »

............
Last edited by HueyLD on Sat Feb 07, 2015 3:38 pm, edited 1 time in total.
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Re: Change the name of the "Backdoor Roth" to something else

Post by White Coat Investor »

tfb wrote:
EmergDoc wrote:I credit Harry Sit (The Finance Buff) with the coining of the "Backdoor" term, although perhaps incorrectly.
Really? I should've trademarked it then. :) Even Vanguard used it. https://personal.vanguard.com/us/insigh ... /2505-Exc2

I still see it as an unintended consequence which can't be fixed without new legislation. It's not illegal but it's not something they promote either. It's in the same camp as using HSA as a stealth IRA, file-and-suspend, deduct-and-convert, 529 pass-through, and a number of other not-as-intended maneuvers.
I wrote about it the first time in the summer 2011, and your article predated mine by at least 6 months. It's the earliest one I see written on the first several pages of google results on the term.

I now see doctors recommending it to each other on doctor-related forums, and am confident it is mostly a result of my work, so that's pretty cool. And I heard about it from you, so that's even better.
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Re: Change the name of the "Backdoor Roth" to something else

Post by freebeer »

Iorek wrote:
fundtalker123 wrote:I think it is possible that some lawmakers read some online discussion forums. I do not like the idea that if they read about something described using language which incorrectly suggests some trick being pulled, as opposed to simply describing a perfectly legal, logical, and (one can only assume) intended means for retirement savings for members of the public, they might incorrectly decide that some laws need changing. Therefore I do not like at all the use of such a term.
I will concede it is legal, but it is hardly logical, and I think assuming it was intended gives far too much credit to Congress. Frankly the situation right now is just silly-- Congress should either lift the contribution limit or end the backdoor Roth (and I know which one I'd do), but given that Congress seems incapable of doing anything right now I hardly think a discussion on this forum is going to matter much one way or the other.
this type of discussion is not even permissable on this forum... I"m surprised the thread hasn't been locked...
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Re: Change the name of the "Backdoor Roth" to something else

Post by White Coat Investor »

Give me a break.

I agree with Lorek. It's not logical, the contribution limit should be lifted or the conversion income limit should be reinstated, and Congress does seem incapable of doing much due to the severe partisanship and split control of the houses. Was his language a little inflammatory? I guess so. But that's hardly a reason to lock yet another useful thread.

I wish people would either quit calling for threads to be closed, or volunteer to be moderators themselves. The mention of a politcal institution doesn't need to be the impetus for locking a thread. If the moderators deem a line to be crossed, they can just erase that line in his post and add some red text.
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Re: Change the name of the "Backdoor Roth" to something else

Post by bhsince87 »

My question is, does anything think it would be helpful or useful to begin referring to backdoor Roths as something else?
No.
Time is what we want most, but what we use worst. William Penn
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Re: Change the name of the "Backdoor Roth" to something else

Post by placeholder »

There's no practical way to forbid backdoor Roth without reinstating income limits for conversion which they don't want because they like high tax people converting taxable IRAs and the fact that a few people can exploit that is a poor reason to let all the high tax folk get to do Roths.
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Re: Change the name of the "Backdoor Roth" to something else

Post by dr direction »

Give me a break.

I agree with Lorek. It's not logical, the contribution limit should be lifted or the conversion income limit should be reinstated, and Congress does seem incapable of doing much due to the severe partisanship and split control of the houses. Was his language a little inflammatory? I guess so. But that's hardly a reason to lock yet another useful thread.

I wish people would either quit calling for threads to be closed, or volunteer to be moderators themselves. The mention of a politcal institution doesn't need to be the impetus for locking a thread. If the moderators deem a line to be crossed, they can just erase that line in his post and add some red text.
I completely agree with this. There can be such a puritanical streak here where some posters try to censor other's ideas and shut down threads. As long as people aren't shilling or trolling, let ideas be published and let the chips fall where they may.

(I also agree that the backdoor IRA makes no sense ideologically, though this doesn't stop me from partaking.) As such the term "backdoor" is perfectly descriptive.

DD
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

dr direction wrote:
I wish people would either quit calling for threads to be closed, or volunteer to be moderators themselves. The mention of a politcal institution doesn't need to be the impetus for locking a thread. If the moderators deem a line to be crossed, they can just erase that line in his post and add some red text.
I completely agree with this. There can be such a puritanical streak here where some posters try to censor other's ideas and shut down threads. As long as people aren't shilling or trolling, let ideas be published and let the chips fall where they may.
Sure there is!

For example, some people make it a habit of criticizing the moderators. That is a violation of the rules. When I see people criticizing the moderators, I click the little red exclamation mark and report the violation. I don't call for the thread to be shutdown in the thread itself, but I will sometimes point out the rules, not just for the violators to see, but for the general public, most of whom haven't read the Forum Policy.

Now where is that red exclamation mark again?
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neurosphere
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Re: Change the name of the "Backdoor Roth" to something else

Post by neurosphere »

I see that the range of responses was about what I expected. I don't think the term "backdoor" is so entrenched that it can't evolve into something else, but I don't intend to lead the crusade. Perhaps I'll just continue to use "indirect Roth (sometimes referred to as a Backdoor Roth)" when appropriate.
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Re: Change the name of the "Backdoor Roth" to something else

Post by Geoff »

EmergDoc wrote:I credit Harry Sit (The Finance Buff) with the coining of the "Backdoor" term, although perhaps incorrectly. Bloggers like Harry, myself, Mike Piper, and this forum are responsible for popularizing it. However, over the last 2 or 3 years, I'm seeing it used in the mainstream media (Forbes, Market Watch, WSJ) more and more.
EmergDoc wrote: I wrote about it the first time in the summer 2011, and your article predated mine by at least 6 months. It's the earliest one I see written on the first several pages of google results on the term.
You're a few years off.

Mary Beth Franklin: 2006 in Kiplinger
Walter Updegrave: 2007 in Money
Mary Bader and Steve Schroeder: 2007 in The CPA Journal
sscritic
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

Geoff wrote:
EmergDoc wrote:I credit Harry Sit (The Finance Buff) with the coining of the "Backdoor" term, although perhaps incorrectly. Bloggers like Harry, myself, Mike Piper, and this forum are responsible for popularizing it. However, over the last 2 or 3 years, I'm seeing it used in the mainstream media (Forbes, Market Watch, WSJ) more and more.
EmergDoc wrote: I wrote about it the first time in the summer 2011, and your article predated mine by at least 6 months. It's the earliest one I see written on the first several pages of google results on the term.
You're a few years off.

Mary Beth Franklin: 2006 in Kiplinger
Walter Updegrave: 2007 in Money
Mary Bader and Steve Schroeder: 2007 in The CPA Journal
Sure there is!

I think the term is "prior art." OK, that's for patent law, not copyright law, but I think copyright works on the FIFO principle. Unless our bloggers can post evidence from before 2006, they can't really claim it as their own.

Now for trademark law, it gets a little murkier.
A trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services.
So which of our bloggers is selling Backdoor Roths?
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Re: Change the name of the "Backdoor Roth" to something else

Post by an_asker »

sscritic wrote:[...]Sure there is![...]
I don't get the relevance/significance of the above phrase. It is like a .header (as opposed to a .sig) in your posts! :-)
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

an_asker wrote:
sscritic wrote:[...]Sure there is![...]
I don't get the relevance/significance of the above phrase. It is like a .header (as opposed to a .sig) in your posts! :-)
When you change your sig, all your old sigs get replaced by your new sig.* History is lost. The same is true of your avatar. There were some oldies but goodies that have gone to the avatar graveyard, and I miss them. However, when you put text in your post, it lasts forever. I encourage everyone to use a header instead of a signature (the more meaningless the better in my mind :) ).

* Your sig can also be removed by the powers that be. I assume the powers that be could replace your header in your text, but it would be a lot more work I imagine.
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Re: Change the name of the "Backdoor Roth" to something else

Post by an_asker »

sscritic wrote:
an_asker wrote:
sscritic wrote:[...]Sure there is![...]
I don't get the relevance/significance of the above phrase. It is like a .header (as opposed to a .sig) in your posts! :-)
When you change your sig, all your old sigs get replaced by your new sig.* History is lost. The same is true of your avatar. There were some oldies but goodies that have gone to the avatar graveyard, and I miss them. However, when you put text in your post, it lasts forever. I encourage everyone to use a header instead of a signature (the more meaningless the better in my mind :) ).

* Your sig can also be removed by the powers that be. I assume the powers that be could replace your header in your text, but it would be a lot more work I imagine.
Sure there is!

;-)
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

an_asker wrote:
sscritic wrote:
an_asker wrote:
sscritic wrote:[...]Sure there is![...]
I don't get the relevance/significance of the above phrase. It is like a .header (as opposed to a .sig) in your posts! :-)
... I encourage everyone to use a header instead of a signature (the more meaningless the better in my mind :) ).
Sure there is!

;-)
Let me publicly announce that "Sure there is!" is not owned by me. I would declare it to be in the public domain, but I stole it from someone else. You all have my permission to steal it in turn from me.
dr direction
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Re: Change the name of the "Backdoor Roth" to something else

Post by dr direction »

The phrase "sure there is" is a clear violation of forum guidelines.

I wish someone would kill this topic.
sscritic
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Re: Change the name of the "Backdoor Roth" to something else

Post by sscritic »

dr direction wrote:The phrase "sure there is" is a clear violation of forum guidelines.

I wish someone would kill this topic.
Sure there is!

Puritans abound.
There can be such a puritanical streak here where some posters try to censor other's ideas and shut down threads
LOL
beardsworth
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Re: Change the name of the "Backdoor Roth" to something else

Post by beardsworth »

The Circuitous Roth?

The Loophole Roth?

The Sneaky Roth?

:)
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DRiP Guy
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Re: Change the name of the "Backdoor Roth" to something else

Post by DRiP Guy »

jimb_fromATL wrote:It is a little strange-sounding, but "loophole that the feds probably didn't think about and will probably close one of these days" doesn't roll off the tongue as easily, and is a lot harder to type.

jimb
I guess "401(k)" fits that bill as well!

Eek!

EDIT TO ADD: On topic, I would weigh in with the 'leave the term alone' bunch -- I am also among those childish creatures who enjoy it's easily entendre'd nature. I freely admit that in this thread, I have snickered and will likely snicker again.
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tfb
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Re: Change the name of the "Backdoor Roth" to something else

Post by tfb »

Geoff wrote:
EmergDoc wrote:I credit Harry Sit (The Finance Buff) with the coining of the "Backdoor" term, although perhaps incorrectly. Bloggers like Harry, myself, Mike Piper, and this forum are responsible for popularizing it. However, over the last 2 or 3 years, I'm seeing it used in the mainstream media (Forbes, Market Watch, WSJ) more and more.
EmergDoc wrote: I wrote about it the first time in the summer 2011, and your article predated mine by at least 6 months. It's the earliest one I see written on the first several pages of google results on the term.
You're a few years off.

Mary Beth Franklin: 2006 in Kiplinger
Walter Updegrave: 2007 in Money
Mary Bader and Steve Schroeder: 2007 in The CPA Journal
None of them pointed out the crucial step of moving pre-tax money in IRAs into a qualified plan though.
Harry Sit has left the forums.
sreynard
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Re: Change the name of the "Backdoor Roth" to something else

Post by sreynard »

Or we could add a disclaimer, "Backdoor Roth, *not that there's anything wrong with that." :shock:
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