Sometimes I wonder if I write too often about the Backdoor Roth IRA. Then I see the results of my recent poll where I asked how many of my readers were actually doing a Backdoor Roth IRA. The results were very encouraging, but there is still room for improvement among physicians in general, especially when you realize these are the numbers for those who are really tuned in to personal finance and investing (i.e. those who read this blog.) The poll simply asked, “Are you doing a backdoor Roth IRA?”
Over 500 people responded, and 48% of them said yes. Another 19% said they weren't yet, but planned to soon. So far, so good, we're up to 2/3 of readers. 10% said they couldn't due to pro-rata issues. That means they had a large SEP-IRA or a large traditional IRA and didn't have a 401(k) they could roll it into. That's unfortunate, but I understand. Another 12% simply doesn't need the backdoor Roth IRA since they can make direct Roth IRA contributions. Finally 5% said they were scared of the IRS (presumably the Step Doctrine), 4% admitted to being too lazy, and 2% felt they couldn't afford it. That isn't necessarily bad, as docs in their peak earning years should generally be maxing out tax-deferred options before doing a Backdoor Roth IRA.
My most recent presentation on QuantiaMD was # 4 in the series. This is really a fun format if you haven't seen any of the others. They are 8-15 minutes long, contains slides, polls (usually with much different results than the ones I do of regular site readers), and audio (I'm told I sound like an old fart.) If you haven't seen the first three, you can find them here:
#1 Live Like A Resident (804 comments)
#2 Student Loan Management (398 comments)
#3 Your Largest Tax Break (705 comments)
Number four in the series is all about The Backdoor Roth IRA, which I was unable to adequately explain while covering all the other types of retirement accounts in # 3 and had hundreds of questions about in the comments.
Future presentations include The Safe Withdrawal Rate (runs in December), How Much Do You Really Need to Retire, The Basics of Estate Planning, and The Basics of Asset Protection. I haven't yet made the final three, but hope to finish the series by February or so. I'll be responding to comments made on the presentation all this week. You should be able to watch these presentations without signing up for QuantiaMD, but I think if you qualify to be a member (healthcare workers) you ought to sign up as there is lots of good stuff on there, and like this blog, it's all free to you. I discovered I even get some “Q Points” (redeemable for Amazon bucks and paying for this year's Christmas presents) if you mention me when you sign up, so thanks to all who did so. Click the link below to view the presentation.
At any rate, check this presentation out and then come back and let me know what you think in the comments section. It often takes a few tries for docs to really “get” the Backdoor Roth IRA? Why is that? Have you found a particularly effective way to explain the concept? Comment below!