The mega backdoor Roth lets you contribute $76,000 a year to a Roth account regardless of income. Contribute $7,000 to a Roth IRA, $23,000 pre-tax to a 401(k), and $46,000 after-tax, then convert the after-tax portion. At 10% annual returns, you hit $1 million tax-free in about 7.5 years.
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Have you heard of the mega backdoor Roth? It is truly the fastest way to get to a million dollars tax free. First, before I give you the steps, you have to realize this works for anyone at any age, no matter their income. That's why it's called the back door. Don't listen to an advisor that says you make too much money and can't do a Roth. Step one, you open up a Roth IRA and if you're under age 50, you contribute your $7,000. Step two, you're going to start using your 401K at work. Or if you're an entrepreneur, your solo 401K and you're going to contribute your 23,000 DOL. Ready for the big move? Step three, you're going to do an after tax contribution to the 401k at work or your solo 401k up to $46,000. And step four, once you make that after tax contribution, you convert it to Roth. The result? At the end of the day, you will have $76,000 in Roth IRA and 401k money set aside in one given year. Now if that's not crazy enough, let's do the math. At a 10% return over seven and a half years, you're going to have a million dollars tax free. Now for some of you naysayers, 10 return mark, what are you talking about? That's because you're self directing this retirement account. You're investing in what you know and maybe even getting better than 10%. And the key? Just getting educated and being self disciplined. Anybody can do this. You can do this. Want more strategies to build wealth? Hit the follow button below to learn more financial insights.
