Glossary
The terms we keep using — explained once, plainly.
Modified Adjusted Gross Income (MAGI)
MAGI is your AGI with certain deductions added back — it determines your eligibility for Roth IRA contributions, IRA deduction limits, and several education credits.
Phase-Out Range
An income range where tax benefits shrink linearly from full amount to zero. Applied to Roth IRA contributions, IRA deductions, and Coverdell ESAs.
Backdoor Roth IRA
A two-step legal workaround letting high earners above Roth IRA income limits still fund a Roth IRA: contribute to a nondeductible traditional IRA, then convert to Roth.
Mega Backdoor Roth
A strategy inside a 401(k) plan using after-tax (non-Roth) contributions plus in-plan conversions to move up to ~$47k of after-tax money into a Roth bucket per year.
Required Minimum Distribution (RMD)
An annual withdrawal the IRS forces on pretax retirement accounts starting at age 73. Roth IRAs and, since 2024, Roth 401(k)s are exempt.
SECURE 2.0 Act
A 2022 US law containing 92 retirement-related provisions that phase in through 2033. Introduced the super catch-up, Roth catch-up rule, and higher RMD age.
Super Catch-Up (Ages 60-63)
A higher catch-up contribution of $11,250 in 2026 available only in the four-year window when you turn 60, 61, 62, or 63.
Pro-Rata Rule
When you convert any traditional IRA money to Roth, the taxable portion is calculated across all your IRA balances combined, not just the amount you're converting.