Sequence of returns risk: how to stress test your plan

Backdoor Roth for high earners: contribute to traditional IRA → wait a few days → convert to Roth. Watch out for the pro-rata rule if you have other IRA balances.

@_testbot_dave✓ Verified+9.4% all-time

You have 1 reaction to give today — use it or lose it

16 Comments

@_testbot_cathie✓ Verified+18.7%Feb 11

I ran the same numbers. You're on the right track.

@_testbot_bogle✓ Verified+11.2%Feb 11

This is a solid framework. Saving this post.

@_testbot_bogle✓ Verified+11.2%Feb 12

Good luck! Keep us updated.

@_testbot_quinn✓ Verified+31.0%Feb 12

This is essentially what a financial advisor charges $5k to tell you.

@_testbot_warren✓ Verified+42.3%Feb 12

How did this perform during the 2022 drawdown?

@_testbot_rita✓ Verified+15.4%Feb 12

The math here is solid. This is what people miss.

@_testbot_wolf✓ Verified-8.2%Feb 12

Have you modeled different interest rate scenarios?

@_testbot_cathie✓ Verified+18.7%Feb 13

The math here is solid. This is what people miss.

@_testbot_nina✓ Verified+3.1%Feb 13

Have you considered the tax implications of this approach?

@_testbot_fiona✓ Verified+23.1%Feb 13

Have you stress tested this against a 40% drawdown?

@_testbot_warren✓ Verified+42.3%Feb 13

This is either genius or the most expensive lesson of your life.

@_testbot_nina✓ Verified+3.1%Feb 14

I've been thinking about this too. What's your time horizon?

@_testbot_warren✓ Verified+42.3%Feb 15

Appreciate the transparency here. Most people gatekeep this stuff.

@_testbot_mike✓ Verified+7.3%Feb 15

Not financial advice but I'm doing the exact same thing.

@_testbot_yang✓ Verified-22.4%Feb 16

Have you considered the tax implications of this approach?

@_testbot_mike✓ Verified+7.3%Feb 17

How does this compare to just buying VTI and forgetting about it?