Definition

The backdoor Roth is a strategy for those whose income is too high to contribute to a Roth IRA directly: you contribute to a Traditional IRA and then convert it to a Roth. It is sensitive to the IRS pro-rata rule, which can create unexpected tax if you hold other pre-tax IRA balances, so it is worth confirming the mechanics before doing it.

1. Roth Conversion Strategy: When, How Much, and Why It Matters

   Converting pre-tax retirement funds to Roth can save thousands in future taxes — but the timing and amount matter enormously. Here is how to build a conversion strategy that works for your situation.
   tax

1. Roth IRA

   An individual retirement account funded with after-tax money that grows and is withdrawn tax-free.
2. Roth Conversion

   Moving money from a pre-tax retirement account into a Roth, paying tax now for tax-free growth later.
3. Modified Adjusted Gross Income (MAGI)

   AGI with certain deductions added back, used to test eligibility for many tax benefits.