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Not sure if this plan is viable or makes sense (roth ira vs backdoor vs roth 403b)

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  • Not sure if this plan is viable or makes sense (roth ira vs backdoor vs roth 403b)

    I contributed to a roth ira (vanguard - vtsax) in 2021. I am going to file MFJ when we file taxes in next week or two. I have also been contributing to my employer based roth 403b (fidelity - fskax), but recently found out residents don't get their contributions matched.

    I have not contributed to that roth ira in 2022 yet because I switched to MFS this year for w4 and intend to accordingly file MFS when taxes are due next year (reason doing MFS because of student loan repayments and falling well above the 10k limit for couples filing MFS).

    My questions is what should I do with this roth ira I currently have? As stated before, I have been contributing to a roth 403b with my residency employer but unfortunately no match is offered. My plan is to:
    1. continue contributing to roth 403b as if it was my roth ira
    2. at end of residency: rollover roth 403b (with fidelity) to the current roth ira (at vanguard) and switch back to MFJ (now at attending salary can manage the student loan repayments).
    3. i would then convert the roth ira to a backdoor roth because income is above MFJ limit.

    Does this plan make sense? It seems like the backdoor roth process is a once a year process and for those that have 6k cash on deck (also don't wanna deal with the tax stuff that comes with the backdoor conversion), which is why I'm leaning towards the above plan...unless of course I’m missing or unaware of something. Any suggestions? I am a 2nd generation citizen and don't come from a financially sound background so I just don't wanna mess things up. Thanks in advance.

  • #2
    Keep doing the Roth IRA. You don’t convert a Roth IRA to a backdoor Roth IRA. It’s all just in a Roth IRA.

    eventually your income will be too high. That is when your contribute to a IRA and then convert that to your existing Roth IRA. When you transfer your Roth 403b to your Roth IRA there won’t be any taxes due, and this is what you should do when done with training.

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