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Backdoor Roth IRA Strategy

Backdoor Roth IRA Strategy: 

High income earners are generally ineligible to contribute directly to Roth IRAs, but this IRS-approved strategy allows even those who have income above the limits to fund Roth accounts annually. 

Basic steps include:

  • Open a Traditional IRA
  • Make a non-deductible contribution up to the annual limit
  • Convert the amount to Roth IRA
  • Individual has effectively “contributed” to a Roth IRA and can repeat steps each year

For a more detailed review of this strategy, including IRS income limits, annual contributions limits, and the Pro Rata Rule, download the PDF below.

 

(Approval code: BF1/BFA0048)

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