For people earning a lot during their career but not planning to earn much when they reach retirement age, this isn’t a big deal. Their tax rates will be low when they’ve reached retirement age, so paying income taxes on the money they take out of a traditional IRA in retirement won’t take a big bite out of their income. For those people, a traditional IRA is perfect.
The problem comes when someone is still earning a lot in retirement and wants to take money out of their traditional IRA. They’re going to pay a lot in taxes. Those are the people that a “backdoor Roth IRA” is going to help.
The problem comes when someone is still earning a lot in retirement and wants to take money out of their traditional IRA. They’re going to pay a lot in taxes. Those are the people that a “backdoor Roth IRA” is going to help.
