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Backdoor Roth Question(s)
Old 09-27-2019, 10:13 AM   #1
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Backdoor Roth Question(s)

I have been thinking about trying to do a backdoor Roth conversion for a while. I've read several very good articles on the mechanics and pitfalls (
and here

But I am still left with some questions.

First, a question about aggregation of IRAs. I don't have any IRAs, but I do contribute the maximum to the tax-deductible TSP. If I were to contribute to a non-deductible traditional IRA, is my TSP considered a 401(k) or is it considered an IRA and I would then face aggregation of the accounts during a backdoor conversion? I *think* since the TSP is an employer retirement account it would not fall into the IRA aggregation rule (per Kites link), but I just want to be sure.

Second, I use T. Rowe Price for my investing. Looking on their website for opening an IRA, there is no option to open a "Non-deductible Traditional IRA". For anyone who has done this, do I just open a traditional IRA and it is automatically non-deductible b/c I'll be maxing out my TSP? Or is it non-deductible because I'll be reporting it that way on Form 8606? I'm just confused when I read articles and they make references about contributions to their "non-deductible IRAs" like it's an option they can select through their investor's website.

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Old 09-27-2019, 10:37 AM   #2
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First, a TSP is not an IRA.

Second, you just open a traditional IRA and make non-deductible contributions to it. Your IRA custodian doesn't care and doesn't need to know whether your contributions are deductible or non-deductible - you're supposed to keep track of that yourself.

Some people, including me, open two different traditional IRAs if they're planning to make deductible and non-deductible IRA contributions because we think it's easier to keep track of what's going on if the contributions are segregated by account.

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Old 09-27-2019, 06:35 PM   #3
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Got it. Appreciate the clarification.
You are not fully diversified unless part of your portfolio is underperforming.
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