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)