Confusion on Investopedia content for Backdoor Roth IRA strategy

Submitted by william brady on Mon, 2022-07-18 15:34

I am trying to reconcile the contribution limits for IRAs with the Roth backdoor strategy . If you check the Investopedia content , by clicking the link below, under the paragraph “Tax Implications of a Backdoor Roth IRA”, the last sentence in that section states that “with a backdoor Roth IRA coversion, these limits don’t apply”. Meaning that the income and contributions limits for IRAs do not apply, which contradicts the standard IRA contribution limits.
What are your thoughts about this Investopedia content?

https://www.investopedia.com/terms/b/backdoor-roth-ira.asp

Thank you!!!!



Submitted by Alan - IRA critic on Mon, 2022-07-18 15:50

  • Their points are not clearly stated. It is correct that there are no income limits to make the non deductible TIRA contribution or the conversion, but there is still a limit to the amount of the non deductible contribution. However, there is no dollar limit to the amount that can be converted. Therefore, if you make the ND contribution of 6000 and it gains 500 to 6500 before you convert, you would still be able to convert the entire 6500.
  • I also noted that footnote #8 is incorrect. There is no limit to the amount of conversions that can be done in any time period because a conversion does not count relative to the one rollover limitation over a 12 month period.


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