When your income is too high to contribute directly to a Backdoor Roth IRA, a legal strategy that lets high earners contribute to a Roth IRA indirectly by converting a traditional IRA. Also known as Roth conversion ladder, it’s how millions of doctors, entrepreneurs, and tech workers save for retirement with tax-free growth. The IRS sets income limits for Roth IRAs—$161,000 for single filers and $240,000 for married couples in 2025—but there’s no limit on converting money from a traditional IRA. That’s the loophole everyone uses.
Here’s how it actually works: you put money into a Traditional IRA, a tax-deferred retirement account where contributions may be deductible, then immediately move it to a Roth IRA, a retirement account where you pay taxes now but withdraw everything tax-free in retirement. No new money is added to the Roth—just a transfer. If you don’t have other pre-tax IRA money lying around, the conversion is usually tax-free. But if you do, the IRS makes you pay taxes on the proportion of pre-tax cash you’re moving. That’s where people mess up.
This isn’t a trick. It’s a legal, widely documented strategy that the IRS has never closed. But it’s not for everyone. If you already have a big traditional IRA with years of tax-deductible contributions, the backdoor Roth can trigger a big tax bill. And if you’re not careful about timing—like rolling over a 401(k) into an IRA right before the conversion—you could get hit with taxes you didn’t expect. The key is clean, simple moves: open a traditional IRA, fund it with after-tax dollars, convert it right away, and leave your other IRAs alone.
Most of the posts below show real ways people use this strategy to build tax-free wealth. You’ll find guides on avoiding the pro-rata rule, how to time conversions with low-income years, and why some brokers make it harder than it needs to be. You’ll also see how this fits into bigger retirement moves—like coordinating your 401(k), taxable accounts, and tax-loss harvesting. This isn’t about gambling with the IRS. It’s about using the rules the way they were meant to be used: to give you more control over your money in retirement.
High earners can't contribute directly to Roth IRAs, but the backdoor Roth IRA lets them bypass income limits legally. Learn how it works, how to avoid the pro-rata trap, and why 2025 might be your last chance.
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