Legendary investor and billionaire Peter Thiel has used a Roth IRA to grow a $5 billion dollar account on which he legally owes zero taxes.  Sounds too good to be true?

Well, it’s not, but you need to know the rules and techniques to do the conversion correctly.

The good, old-fashioned version of the backdoor Roth IRA involves: – Step #1: Making a contribution to a Traditional IRA – Step #2: Converting the IRA to a Roth IRA

What is a Backdoor Roth IRA?

Backdoor Roth conversions allow high-income earners an opportunity to contribute to a Roth IRA, despite being over the low income thresholds.

Who is a Backdoor Roth IRA For?

Covered By Retirement Plan At Work

The regular backdoor method is best used by individuals already maxing out a company retirement plan such as a 401(k).

If you are not covered by a company-sponsored retirement plan, you are then eligible to make a tax-deductible contribution to a Traditional IRA.

Not Covered By Retirement Plan At Work

There are two slight variations to the “backdoor Roth” which we will discuss: – Variation #1: Rolling a pre-existing (pre-tax money) IRA to a Roth IRA – Variation #2: Rolling a Traditional 401(k) to a Roth IRA

Backdoor Roth Variations

TOP Dollar Investor

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