Free course · Retirement · Beginner
The Taxman Can Wait Outside: Growing Money in Roth and HSA Accounts
A free beginner Roth and HSA course that starts with the first deposit and ends with a backdoor conversion, with the withdrawal rules in between that decide what you keep.
- Lessons
- 4
- Time
- About 53 minutes
- Level
- Beginner
- Cost
- Free, no sign-up
Who it is for
Anyone saving for retirement who wants money that grows and comes back out without tax, whether they are new to Roth accounts or already hold one.
By the end you can
- Check whether a Roth withdrawal is qualified under the age and five-year tests
- Work out which dollars leave a Roth IRA first and what an early withdrawal costs
- Use a health savings account as a long-term, triple tax-free account
- Estimate what a Roth conversion costs and how the pro-rata rule taxes a backdoor Roth
Lessons
- 01 How Roth Accounts Grow Tax-Free: Roth IRA and Roth 401(k)
How Roth accounts grow tax-free: the after-tax deposit, the age and five-year tests for a qualified withdrawal, and how Roth IRA and Roth 401(k) rules differ.
- 02 Getting Roth Money Out Before 59½: Ordering Rules and Penalties
Getting Roth money out before 59½: which dollars leave first, when the 10% additional tax applies, and how Form 8606 tracks your basis.
- 03 The Health Savings Account: A Triple Tax Break for Retirement
The health savings account triple tax break: who qualifies, how it saves tax going in, growing and coming out, and what nonmedical withdrawals cost.
- 04 Roth Conversions and the Backdoor Roth: Tax Now, Tax-Free Later
Roth conversions and the backdoor Roth: what a conversion costs, how the pro-rata rule taxes it, and which years make converting worth the bill.
Money leaves a Roth IRA, a Roth 401(k) and a health savings account untaxed. That holds only if you follow the rules for getting it out, and those rules differ from one account to the next, with a few of them costing real money when they are missed by a year or applied to the wrong dollars.
The lessons are short. Every sum uses round hypothetical accounts.
Who it suits
Anyone saving for retirement who wants growth the IRS never taxes. You might be opening a first Roth. You might have an HSA at work and wonder whether it is worth funding past this year’s medical bills, or you might earn too much for a direct Roth IRA contribution and keep hearing about a backdoor route without knowing what it involves or what can go wrong with it.
No tax background is assumed. If you can read a brokerage statement and find total income on a tax return, you have enough.
What to have ready
Bring your latest account statements and last year’s tax return.
The statements show what you hold and whether each account is pre-tax, after-tax or Roth. The return shows your bracket, which the last lesson needs. Made a nondeductible IRA contribution or a conversion in the past? Find your old Forms 8606 as well. They record your after-tax money.
How to work through it
Take the lessons in order. Each leans on the last.
The course begins with how Roth money grows and what makes a withdrawal qualified, because early withdrawals, the second topic, only make sense once those tests are clear, and it ends with conversions, which draw on every earlier idea at once: the tax you pay going in, the clocks that govern coming out and the bracket on your own return. The HSA sits between them.
Each lesson ends with a short quiz. Do the sums by hand first, so you can run them on your own accounts later.
Allow about an hour. Take longer if you stop to pull your own figures.
What it leaves out
Contribution limits are left out because they change most years. The IRS announces new limits and the Roth IRA income range each fall, Publication 590-A covers IRAs and Publication 969 covers HSAs, and you should check the right one before every contribution, since a deposit over the limit draws an excise tax each year until you take the excess back out.
State taxes are out too. So is estate planning. Either can change the answer on a conversion, and situations differ, so a tax professional can check a decision against your whole return.
Where to go after
Go next to the course on tax landmines after the last paycheck. It covers what happens to pre-tax money you never convert, starting with required minimum distributions. Still deciding which account to fund? The Roth or traditional IRA guide settles it by bracket. The retirement topic hub has the rest.
Questions traders ask next
Do I need a Roth account already to take the course?
No. The lessons start from how a Roth account works, so you can follow them before opening one. If you already have a Roth IRA, a Roth 401(k) or an HSA, keep the statements nearby and check each rule against your own balances as you go.
Does the course give this year's contribution limits?
No. Contribution limits, and the income range for Roth IRA eligibility, change most years, so the lessons use hypothetical round figures and tell you where to look. The IRS announces each year's limits in the fall, and Publications 590-A and 969 carry them once the year begins.