Maximizing Your Roth IRA

So let's say you could do an $8,000 IRA contribution. So in a backdoor Roth, what you're doing is you're making that contribution. Then you're turning right around and you're converting that same $8,000 into a Roth. So let's follow kind of what happens here. You take $8,000 of your money, and at the end of the year, you end up with $8,000 in a Roth following by way of a backdoor transaction. Instead, let me suggest that you do something totally different. Use that same $8,000, but use it for taxes. And you use it for taxes to pay for conversions. If you had $8,000 in cash, and let's say you're at the 24% tax bracket, that means you could actually convert about $32,000 of your existing IRA account.