How do rich people have roth ira?

While people with incomes above a certain amount are not eligible to contribute directly to a Roth IRA, they can contribute to a traditional IRA and then transfer that money to a Roth IRA. A Roth IRA is one of the best ways to minimize taxes. Many people earn too much to qualify for a Roth IRA. Not long ago, an alternative emerged for people with high incomes to minimize taxes and maximize their incomes, known as the “Roth of the rich.” The trick is that, if you exceed these income limits, you can continue to contribute to a traditional non-deductible IRA and then convert that traditional non-deductible IRA into a Roth account (non-deductible means you can't deduct your IRA contributions from your taxes; in other words, they can't be attributed to your income).

There are many IRA Gold Companies that specialize in helping people with high incomes take advantage of this strategy. For example, a self-directed Roth IRA can hold investments such as real estate or private company stocks, the latter of which is what Thiel held for the first time in his account in 1999, before PayPal went public, according to ProPublica. In many cases, you can convert just enough of an IRA into your Roth IRA to stay within your same marginal tax bracket. In an earlier post this year, I pointed out that you can reduce general taxes by distributing the conversions from your IRAs to Roth IRAs. Even if a self-directed Roth IRA wasn't a good fit for you, you'd still enjoy tax benefits if you invest through a standard Roth IRA.