Once your income starts going over a certain amount…👇🏼 ⠀⠀⠀⠀⠀⠀⠀⠀⠀ You start being “blocked” from being able to add $$$ to a Roth IRA “the regular way” ⠀⠀⠀⠀⠀⠀⠀⠀⠀ In other words, you can get penalized for trying to contribute to a Roth IRA ⠀⠀⠀⠀⠀⠀⠀⠀⠀ The “Backdoor Roth” is a workaround that higher income earners have used for years to still be able to build tax free wealth in a Roth IRA even though their income is over the threshold ⠀⠀⠀⠀⠀⠀⠀⠀⠀ In a nutshell, the Backdoor Roth conversion involves: ⠀⠀⠀⠀⠀⠀⠀⠀⠀ 1) Maxing out a Traditional IRA w/ after-tax $$$ ⠀⠀⠀⠀⠀⠀⠀⠀⠀ 2) Converting the cash over to a Roth IRA ⠀⠀⠀⠀⠀⠀⠀⠀⠀ 3) Investing the cash in the Roth IRA ⠀⠀⠀⠀⠀⠀⠀⠀⠀ 4) Avoiding the pro-rata rule (so you don’t have to pay taxes “again” on $ that’s already been taxed) ⠀⠀⠀⠀⠀⠀⠀⠀⠀ 5) Filing Form 8606 come tax time ⠀⠀⠀⠀⠀⠀⠀⠀⠀ If it’s your first time doing it, it can feel a bit overwhelming but once you do it correctly once, it’s a matter of rinsing and repeating in future tax years ⠀⠀⠀⠀⠀⠀⠀⠀⠀ The ke...