You’ll hear this term thrown around. All this means is, you have a regular retirement account of some sort. A Traditional 401K or IRA that has a lot of money in it and you want to move some of that money into a ROTH IRA. The reason why you would want to send your money through the backdoor into the ROTH is because the ROTH IRAs have extremely low annual contribution limits. You can only put in a few thousand dollars each year. The backdoor method allows you to slam a shit ton of money into the ROTH. It’s dumb, but it is what it is.
First, you’d need to have a traditional IRA or 401k account already that has a significant amount of money in it in my opinion. Hundreds of thousands of dollars would be a good start. Then you would have to open a ROTH IRA account.
What you would do is, for a number of years, you would contribute to your traditional IRA/401k and when you build that account up to be pretty big, you can start looking at ways to convert chunks, or a big chunk, of that into your ROTH.
Watch out though, any money you “convert “from your traditional account into your ROTH will be taxed like regular income. So if you don’t work and have $0 income for a particular year and you decided to backdoor-roth-convert $50,000 from your traditional retirement to your ROTH, the IRS is going to see that $50,000 as your income for the year and you’ll be in whatever tax bracket as if you made $50,000 for the year.