Roth IRAs are one of the most valuable tools in retirement planning. Money in a Roth grows tax-free, can be withdrawn tax-free in retirement, and can be passed on to a spouse or heirs without creating a future tax bill.

The problem? Many people are told they make too much money to contribute to a Roth IRA.

In this lesson, we explain a strategy called the backdoor Roth IRA—what it is, who it’s for, and how it works—so you can understand whether it fits into your retirement and tax planning.

Why Roth IRAs Matter More Later in Retirement

During retirement, taxes often become more complicated, not simpler. You may be pulling income from Social Security, pensions, IRAs, and investment accounts, all of which are taxed differently. On top of that, when one spouse passes away, the surviving spouse usually files taxes as a single taxpayer, often at higher rates.

Roth IRAs can help manage this risk. Because Roth withdrawals are tax-free, they don’t increase your taxable income, don’t affect Medicare premiums, and don’t create additional taxes for your surviving spouse.

That’s why many people want to build up more Roth money—but income limits often get in the way.

Why Some People Can’t Contribute Directly to a Roth IRA

For 2025, if you are married and your income is above $246,000, you are no longer allowed to contribute directly to a Roth IRA. For single filers, the limit is lower.

If your income is below these limits, you don’t need a backdoor Roth—you can simply contribute directly. But for higher earners who are still working, the backdoor Roth can open the door to tax-free growth.

What Is a Backdoor Roth IRA?

A backdoor Roth IRA is not a special account. It’s a strategy.

Instead of contributing directly to a Roth IRA, you:

Make a non-deductible contribution to a traditional IRA

Then convert that IRA to a Roth IRA, usually right away

Because the contribution was made with after-tax money, the conversion itself may be tax-free—if done correctly.

This allows some higher-income individuals to move money into a Roth IRA even though they wouldn’t normally be eligible.

How Much Can You Contribute?

If you’re age 50 or older, you can contribute:

• $8,000 for 2025
• $8,600 for 2026

If you haven’t yet filed your 2025 tax return, you may be able to make both contributions at the same time, potentially moving $16,600 per person into Roth accounts.

For married couples, that can mean over $33,000 shifted into tax-free Roth money using after-tax dollars.

You Must Have Earned Income

One important rule catches many retirees by surprise:
You must have earned income from a job to make an IRA contribution.

If both spouses are fully retired and living on Social Security, pensions, or investment income, this strategy won’t work. In that case, Roth conversions—not contributions—may be the right tool.

A Critical Rule Many People Miss: The Pro Rata Rule

The biggest mistake people make with backdoor Roth IRAs is ignoring the Pro Rata Rule.

If you already have money in a traditional IRA, the IRS treats all of your IRAs as one combined account—even if the money is in separate accounts.

This can cause part (or most) of your Roth conversion to become taxable, defeating the purpose of the strategy.

In some cases, this issue can be solved by rolling existing IRA money into a 401(k), if your plan allows it. But this step must be done carefully and correctly.

Why This Strategy Requires Careful Planning

The backdoor Roth IRA can be a powerful tool—but it’s also easy to get wrong. Once mistakes are made, they can be difficult or impossible to fix.

That’s why this strategy works best as part of a comprehensive financial plan, where taxes, retirement income, estate planning, and spousal planning are all considered together.

The Bigger Picture: Building Tax-Free Income for You and Your Spouse

At its core, this strategy is about one decision:
Do you want more of your retirement money to be tax-free?

For many couples, especially those planning for a surviving spouse, Roth planning can make a meaningful difference in long-term security. Having tax-free money available later in life can provide flexibility, peace of mind, and protection against rising tax rates.

Final Thoughts

If you’ve been told you’re not eligible for a Roth IRA because your income is too high, that may not be the full story. With proper planning, the backdoor Roth IRA may allow you to build more tax-free retirement income than you thought possible.

As always, the details matter. Make sure you understand the rules—or work with someone who does—before moving forward.