The digital era · 2000–today
2010
Roth conversions for all incomes
The income limit on converting to a Roth IRA ends, opening the "backdoor Roth".
Until 2009, only people earning under $100,000 could convert a traditional IRA to a Roth. A 2006 law removed that limit from 2010. Higher earners who couldn't contribute to a Roth directly could now contribute to a traditional IRA without a deduction and convert it: the "backdoor Roth".
💡 Why it made sense then
Conversions are taxed, so opening them to everyone brought in tax revenue sooner.
Ideas it gave us
- 🧭 IRA (traditional and Roth)
An IRA is a US retirement account you open yourself. A traditional IRA may lower your taxes now and is taxed when you withdraw; a Roth IRA is funded with taxed money and qualified withdrawals are tax-free.
Practise with $10,000 in play money
Free. No real money involved.