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FA Magazine | How The 'Backdoor Roth IRA' Can Benefit Some High-Income Clients

fa magazine in the news Aug 29, 2022

Limitations
You can't actually contribute more than $6,000 a year to a Roth IRA, or $7,000 annually if you're 50 or older, whether it's a direct investment or a conversion. That may be why some high earners aren't interested.

"The backdoor Roth is often overlooked because of the relatively small amount of money in play for this particular high-income demographic," said Tom Henske of Fifth Avenue Financial in New York City.

Some 401(k) plans, however, allow you to convert as much as $58,000 a year to a Roth IRA. This is known as a "mega backdoor Roth conversion."

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