The Late Starter · September 12, 2026
I’d heard that high earners aren’t allowed to contribute to a Roth IRA, and that they use something called a “backdoor Roth IRA” instead. I always filed that away as someone else’s problem. As a salaried employee, my income never came close to those thresholds.
Then last year, it became mine.
How I Became a High Earner By Accident
Last year I sold a piece of land in Korea that I’d inherited from my parents. When I wired the proceeds to the US, the sale generated a capital gain. My salary alone would never have pushed me anywhere near the Roth IRA income limits — but that one-time gain did, for that year only.
For 2025, the Roth IRA eligibility rules for a married couple filing jointly look like this:
| MAGI (Married Filing Jointly) | Status |
| Under $236,000 | Full contribution allowed |
| $236,000 – $246,000 | Partial contribution (phased out) |
| $246,000 or more | Not eligible |
(For single filers, the same thresholds are $150,000 and $165,000.)
My Modified Adjusted Gross Income (MAGI) crossed $236,000 that year. A table I’d never have needed to think about as a salaried employee suddenly applied to me — because of one piece of land.
The complication: I had already maxed out my Roth IRA contribution for the year before I knew any of this. For 2025, the base Roth IRA limit is $7,000, with a $1,000 catch-up for those 50 and older, for a total of $8,000 (that catch-up rises to $8,600 starting in 2026). I had already put in the full $8,000 — and now, because of my income, that contribution itself was no longer allowed to be there.
A Two-Step Workaround
This is where I first learned about the backdoor Roth IRA. The mechanism is simple in concept:
- Contribute to a Traditional IRA — there’s no income limit on who can do this.
- Convert that money into a Roth IRA — this conversion step is the “backdoor.”
My situation ran the steps slightly out of order, since I’d already put the money into the Roth IRA directly. I had to move that $8,000 out of the Roth IRA and into a newly opened Traditional IRA first, wait a few days, and then convert it back into the Roth IRA.
- Opened a new Traditional IRA account
- Transferred the $8,000 already sitting in my Roth IRA over to the Traditional IRA
- Waited a few days
- Converted that $8,000 from the Traditional IRA back into the Roth IRA
Despite my worry going in, this didn’t create any additional tax. The money had already been after-tax dollars to begin with, and the small amount of growth over those few days was negligible.
The Catch That’s Still Worth Knowing
There’s one more thing I learned along the way. The backdoor Roth looks simple on paper, but it gets complicated if you already have pre-tax money sitting in other Traditional IRA accounts. The IRS applies what’s called the “pro-rata rule,” which treats all of your Traditional IRAs as one combined pool when you convert — so a portion of any conversion can end up taxable, in proportion to how much of that combined pool is pre-tax money.
In my case, this wasn’t an issue, since the Traditional IRA I used was brand new and held nothing but that $8,000. But if I’d been carrying an old Traditional IRA, or a rollover IRA from a previous 401(k), the math would have been far messier — and I’d have owed some tax on the conversion.
If you’re in that position, the two common fixes are: convert the pre-tax balance too (and pay the tax on it now, all at once), or — if your current employer’s 401(k) plan allows it — roll the pre-tax Traditional IRA balance into that 401(k) first, which empties out the Traditional IRA side of the pro-rata calculation and clears the way for a clean backdoor conversion going forward.
What This Left Me With
A rule I’d always filed under “for high earners” reached me because I sold a single piece of land. Income isn’t the same every year. An inheritance settled, an asset sold, a bonus that lands at the wrong time — any of these can push you into a bracket you never expected, even just for one tax year.
As someone catching up late on retirement savings, the Roth IRA isn’t an account I want to give up on. It was a relief to learn there’s a legitimate way back in, even in a year when income knocks you out of eligibility. If I hadn’t known about it, I’d likely have either skipped the Roth contribution for the year entirely, or ended up owing the 6% excise tax on an excess contribution I didn’t even know was excess.