Backdoor Roth IRA Explained: Step-by-Step Guide for High-Income Earners in 2024
June 14, 2024
Many high-income earners make too much money to contribute directly to a Roth IRA. However, there’s a workaround to build tax-free dollars for retirement: a backdoor Roth. In this video, Josh Palmer, CFP®, explains the backdoor Roth process step-by-step and highlights some sneaky rules you should be aware of.
Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.
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