The backdoor Roth IRA

A visual walkthrough for high-income earners who can't contribute directly to a Roth IRA — and what it means for long-term wealth.

Part 1 — How it works

The mechanism

Part 2 — The 30-year impact

What $7,000/year becomes

Same after-tax dollars, three different vehicles. The 401(k) line shows what an equivalent pre-tax contribution would yield after retirement taxes — useful context, but the real decision is Roth vs. taxable, since you're already maxing your 401(k).

Annual return7.0%
Years to retirement30
Current marginal tax rate41%
Retirement effective tax rate25%
Backdoor Roth IRA 401(k) equivalent Taxable brokerage
1. Max 401(k) →
2. Backdoor Roth →
3. Taxable brokerage

Recommended savings priority order

Further reading — White Coat Investor

Disclaimer: This page is for educational purposes only and does not constitute financial, tax, or legal advice. Tax laws change. Consult a qualified tax professional or financial advisor before implementing any strategy. The projections use simplified assumptions and do not account for inflation, fee drag, or individual tax circumstances.