How High Income Earners can Contribute to a Roth IRA
Read more about what some people call a back-door Roth IRA contribution. NOTE: This may go away!
Peter Thiel has a $5 Billion Roth IRA
Recently, one of the founders of Paypal, among other successful technology companies, made the news with the size of his Roth IRA. The Roth IRA allows him to grow the money tax free, pull it out tax-free, and transfer it to his beneficiaries income-tax free. It is the same Roth IRA the rest of us have, only much larger. If you are interested in how he did it, click here for more information. If you are interested in your advisor’s opinion, give them a call!
Back-Door Roth IRA
This is a pejorative phrase that describes a common practice. Because of the publicity about one of America’s wealthiest men and his Roth IRA, the “back door” Roth IRA is also getting some “interesting” press.
Roth IRA for High Income Earners
You may have heard of the back-door Roth Conversion which is a horrible name, for reasons I’ll discuss below. So instead of that name, we’re going to call it the “Roth Contribution for High Income Earners”.
Let’s talk about how it works. This diagram shows the process pretty clearly. You may do either or both parts, and each one is a different financial planning consideration.
If you would like to learn more about how this strategy works, click here to read the complete blog post!