Backdoor IRA related question...

[TravisRADMD]

Can the contribution to the traditional IRA remain cash before the transfer to the Roth? I'm maxing out the account in one contribution and will make the transfer next week. Just want to make sure or not if I need to purchase any equity in the traditional before the transfer to satisfy some funky IRS rule.

[JBME]

in fact you want to keep it in cash....

[TravisRADMD]

Thats what I thought but I was a little thrown off from Dr. Dahle's post here he said he keeps the funds in a prime money market fund. I know its very similar but why not just keep it in cash? Am I over thinking the post?

"...I just place it into the Prime Money Market Fund to keep the math simple. Since it yields something like 0.04% and doesn’t go down in value, the sum when you convert will be exactly the same as when you contribute. No gains, no losses...."

https://www.whitecoatinvestor.com/ba...-ira-tutorial/

[Peds]

Thats what I thought but I was a little thrown off from Dr. Dahle's post here he said he keeps the funds in a prime money market fund. I know its very similar but why not just keep it in cash? Am I over thinking the post?

"...I just place it into the Prime Money Market Fund to keep the math simple. Since it yields something like 0.04% and doesn’t go down in value, the sum when you convert will be exactly the same as when you contribute. No gains, no losses...."

https://www.whitecoatinvestor.com/ba...-ira-tutorial/

its cash (equivalent).
yes overthinking.