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Simple Backdoor Roth Question

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  • Simple Backdoor Roth Question

    Please excuse my naivety re: backdoor roth, but I have a simple logistic question. Say I contribute the maximum non-deductible contribution to my Traditional IRA with the intention to convert it to a Roth. Once that money enters the tIRA in the form of cash, does it need to be first invested into individual funds within the Traditional IRA before being converted, or can the account simple have a "cash balance" (nothing yet invested) that then gets converted. I can't seem to find an answer to this question, i.e., whether or not I need to make any investments in the tIRA before conversion, or if a "cash balance" in the tIRA is all I need and then that cash balance gets converted into the rIRA. I see people saying to invest in a money market fund but is that step even necessary? Can a cash balance be what is "converted"? Thanks!

  • #2
    Read: https://forum.whitecoatinvestor.com/...-ira-home-base

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    • #3
      Keep it in cash, convert asa the funds clear, then reinvest.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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