Contributing to a Roth IRA can be an important component of your retirement savings plan. However,  you may be unable to make a regular contribution to a Roth IRA if your income is too high. Thankfully there is a way around the Roth IRA’s income limit with a strategy known as a backdoor Roth contribution. Several factors should be considered when determining if a backdoor Roth contribution is a good strategy for you, and there are multiple steps necessary to properly implement this strategy without penalty.

To help make the analysis easier for you, we have this flowchart that addresses key considerations, including:

• Having multiple retirement accounts
• Pro-rata and aggregation rules
• Step transaction doctrine
• Step-by-step process for making a backdoor Roth contribution

Can I make a backdoor Roth IRA contribution?

While checklists and flowcharts can help you identify different opportunities, we are always available to meet with you to discuss your financial needs and goals, and to help identify what the best opportunities are for you.

 

This content is provided by Windward Private Wealth Management Inc. (“Windward” or the “Firm”) for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. No portion of this blog is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Certain information contained in the individual blog posts will be derived from sources that Windward believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.

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