A backdoor Roth IRA is a strategy that allows high earners to get money into a Roth IRA even when their income exceeds the normal contribution limits. You do this by contributing to a traditional IRA (which has no income limits) and then converting that money to a Roth IRA.

Here's why people use it: Roth IRAs offer incredible benefits—tax-free growth and tax-free withdrawals in retirement—but in 2025, you can't contribute directly if you earn more than $165,000 (single) or $246,000 (married filing jointly). The backdoor strategy sidesteps this limitation legally. The key is to convert soon after contributing and ideally not have other traditional IRA assets, which can trigger taxes on the conversion. While it requires careful execution and potentially professional guidance, a backdoor Roth IRA lets high earners access one of the most powerful retirement savings vehicles available, building a source of tax-free income for their future.