The “backdoor” Roth IRA remains open

Description

Abstract: The Roth IRA is an attractive savings vehicle, offering tax-free retirement income and other significant benefits. Unfortunately, income limitations prevent many people from contributing to these accounts. But even if one can’t contribute directly, there’s no limit on converting a traditional IRA into a Roth. This “backdoor Roth IRA” strategy allows anyone, regardless of income, to enjoy a Roth IRA’s benefits. This article examines how a backdoor Roth IRA works. A brief sidebar explains the aggregation rule.