Explaining “Backdoor Roth IRAs”


Learn how higher income earners can contribute to a Roth IRA

ROTH IRAS ARE A POWERFUL WAY TO SAVE FOR RETIREMENT

Contributions into a Roth IRA are not tax deductible. However, the earnings in the account accumulate tax deferred, and can be distributed completely tax free after age 59½, provided 5 years have elapsed since the tax year of your first Roth contribution. Many investors who might otherwise contribute to a Roth IRA find themselves constrained by the IRS income limits which restrict their ability to contribute to a Roth IRA based on their adjusted gross income (AGI).
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