Description

A backdoor Roth is a way for high-income earners to be able to contribute money into a tax-free Roth IRA account. It is a matter of contributing non-deductible money to a Traditional IRA and then converting that to a Roth IRA. The tricky part comes during the conversion: If you have any money in an IRA that has not yet been taxed, you're going to owe taxes on that.

In today's episode we discuss:

• The difference between a Traditional IRA and Roth IRA
• A simple example of a backdoor Roth when you have no other IRA accounts.
• How taxes work on a conversion
• How you can still do a backdoor Roth even if you have other IRA balances
• A potential way to save on taxes if you can roll your existing Traditional IRA balance into your current 401k account.

Resources:

• Traditional vs. Roth IRAs

Find out more about Mike at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/