Backdoor Roth - IRA account questions


I am aware of the pro rata rule for IRAs with respect to performing a backdoor Roth.

I do have assets in a traditional IRA that I cannot roll over into my 403b at work.

On Vanguard’s webpage regarding backdoor Roths: Backdoor Roth IRA: What it is and how to set it up | Vanguard

" 1. Contribute money to an IRA, and then roll over the money to a Roth IRA. For this strategy to work, you should contribute to a traditional IRA with no balance."

Does the IRS consider ALL money in ANY IRA to be in “one bucket”? My traditional IRA is not with Vanguard. Can I open a Vanguard IRA account and contribute to a traditional IRA then convert it to Roth? Or the money in my traditional IRA will still mess this up?


Hi @penguiNET!

Yep, the IRS does indeed look across all traditional IRA accounts, regardless of where they are held (e.g., Vanguard, Fidelity, Schwab).

PFC has a great blog all about backdoor Roth IRA’s. Here it is if you want to check it out!

Keep us posted with any other questions!

Many thanks for confirming my suspicions. I’m really regretting having a traditional IRA now haha.

I have another question, if you would, please:

I think I’m in a good spot, checked off this list. I am not eligible for Roth IRA. I could have sworn traditional IRA also had income limits, but when I Googled it, apparently it does not.

From taking the PFC course, if I understand correctly, a traditional IRA is taxed both on the way in because it’s post-tax dollars…AND taxed on the way out.

Roth vs Traditional… How do the taxes work? – Personal Finance Club is what I referred to.

My question is, is there any benefit to contributing to a traditional IRA then? How is an account taxed on both ends any different than the taxable brokerage account I’m contributing to all the time? Or am I misunderstanding the tax benefit of a traditional IRA with respect to post tax dollars. I contribute 6k post tax dollars, but on next year’s tax filing, my tax burden reduces by 6k? This is where it gets muddy for me!

Thank you for your time, I appreciate your advice and clarifications of misunderstandings!