How to Leverage a Backdoor Roth IRA

High earners can be priced out of the eligibility to contribute to a Roth IRA. But there's another path to this rich retirement-saving option: the "backdoor" Roth IRA.

(Image credit: Mike Crane)

Roth IRAs are an increasingly popular retirement savings vehicle because they allow retirement savers to generate tax-free income and are not subject to the required minimum distributions associated with a traditional IRA. Yet, despite the long-term tax savings they offer, less than a third of IRA investors have one of these accounts. This disparity could be the result of account income limits, which prohibit taxpayers above certain income levels from investing directly into a Roth IRA.

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Keith H. Clark Jr.
Managing Partner, DWC - The 401k Experts

Keith Clark is co-founder and managing partner of DWC - The 401k Experts, founded in 1999. He is the author of "The Defined Contribution Handbook" and was named one of the top five consultants in "Pension Management Magazine." Clark is also an adjunct professor at the University of Minnesota's Carlson School of Management.