Many a high-income professional who earns too much to make a direct Roth IRA contribution will need to use the backdoor to make a Roth IRA contribution of $6,000 or $7,000 (if age 50 or over). Although it can be straightforward, it can also be unnecessarily complex. Hence, this backdoor Roth FAQ.
You make too much money, fancy pants high earner, to get a tax deduction from a traditional IRA contribution. However, you can still make a non-deductible contribution. Nothing changes on your taxes, and you have more money in an IRA now. Good, it’s protected.
– Do I need to open a traditional IRA and Roth IRA? Yes, you have to create these accounts.
No. Lump sum, and lump convert immediately. [PoF: You may have to wait up to about a week before the money is available. See my tutorial for Vanguard brokerage IRA accounts.]