Back-Door Roth
Saving for retirement can be a concern for anyone, especially as the traditional means, such as pension programs have been starting to disappear from many companies. One of the most common alternatives to the old system is contributions to an Individual Retirement Account, or IRA for short. There are multiple different types of retirement accounts, with the main difference being whether contributions or distributions are taxed. The Roth IRA is often seen as the preferred savings method, as it allows for tax-free distributions once you retire, but it can also be limited by current tax law. This is where it becomes important to understand the back-door method for contributing to a Roth IRA.
The two main barriers in contributing to a Roth IRA are the maximum contribution and maximum income figures. In 2018, a maximum of $5,500 could … Read More