How to set up Backdoor Roth IRA through Charles Schwab in 2025 (full guide, step-by-step)

In this video, I will teach you guys a 6-step tutorial to set up the Backdoor Roth IRA using Charles Schwab specifically for high income earners who can’t directly contribute to the Roth IRA since they’re above the IRS income eligibility. This tax loophole allows people to first contribute (up to $7000 as of year 2025) to a Traditional IRA and later convert it to a Roth IRA. You can deploy this exact same method if you’re using other brokerage as well such as Vanguard, Fidelity, etc. 00:41 What is Backdoor Roth IRA? 04:23 Step 1: Contribution limit 04:47 Step 2: Setup IRA accounts 08:54 Step 3: Contribute from External Account to Traditional IRA 12:50 Step 4: Convert Traditional IRA to Roth IRA 20:12 Step 5: Invest Roth IRA 24:33 Step 6: Form 8606 **RESOURCES** Direct link to Roth IRA conversion on Schwab: https://client.schwab.com/Accounts/Ro... IRA contribution limit and income eligibility: https://www.irs.gov/newsroom/401k-lim... Difference between Roth vs. Traditional IRA:https://www.schwab.com/ira/roth-vs-tr... Roth vs. Traditional IRA calculator:https://www.schwab.com/ira/ira-calcul... Tax Form 8606: https://www.irs.gov/forms-pubs/about-... Charles Schwab referral link: https://www.schwab.com/client-referra... **WATCH NEXT** Set up Mega Backdoor through Fidelity:    • How to Set up Mega Backdoor Roth on F...   6 Hidden HSA mistakes:    • 6 Hidden HSA Mistakes that Could Cost...   _________ **DISCLAIMER** This content for my video is for education and entertainment purposes only. You should use your own discretion to follow any advice as described in this video. This description may contain affiliate or referral links that allow you to find the things mentioned in this video and support the channel at no cost to you. #BackdoorRothIRA #CharlesSchwab #RothIRA #SavingForRetirement