Tax Free Retirement — Backdoor Roth IRAs

Why Roth IRAs?

The main appeal of Roth IRAs is that their distributions are not taxable. Not only it grows tax free, you will also NOT pay taxes when collecting distributions.

What’s the catch?

The IRS limits how much you can contribute to a Roth IRA to the point that you may not be able to contribute anything at all. The backdoor Roth IRA fixes this.

Why do a backdoor Roth IRA?

The backdoor Roth IRA allows you to circumvent Roth IRA contribution limits to avoid taxes in the future with taking distributions.

Why now?

The market is down significantly for the year (the S&P 500 has lost 20% YTD as of November 8th, 2022) making assets like Bitcoin and stocks very cheap. By buying now assets using a Roth IRA, you will avoid paying taxes on the gains on these investment by the time you retire.

What will you get with this guide?

This are the notes that I wrote for myself while researching how to use a Roth IRA to buy Bitcoin.

I expect Bitcoin to grow in value significantly by the time I retire and avoiding taxes at the time of distribution is an appealing solution for me.

The same process can be used for stocks and other assets. I'm sharing it hoping it's helpful for you.

Please consult with a tax professional if you have any questions.