A simple explanation of the backdoor Roth IRA lets you convert a Traditional IRA to a Roth IRA. It lets you convert it even when your income is high for a Roth IRA.
A backdoor Roth IRA is a simple type of a conversion which allows everyone with high incomes to sidestep the Roth IRA’s income limits.
This whole thing means that you can put your money in a simple Traditional IRA and after that you can convert your contributed funds into a Roth IRA. By doing this you can pay some taxes and you’re done.
Even if you didn’t qualify to contribute to a Roth IRA you can go around the qualification and go in through the backyard door.
Thats some very good news if your income is high because by doing this your money can grow tax-free and who doesn’t want to have that?
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