Find out how you can still take advantage of a Roth IRA — even if you earn too much to directly contribute to one.
Roth IRAs are powerful retirement savings accounts that allow tax-free growth and tax-free withdrawals in retirement, provided certain conditions are met. However, if you earn above a certain dollar amount, you aren’t eligible to directly contribute to one.
Fortunately, high-income households can still access the tax benefits of Roth contributions by taking advantage of alternate strategies. Reach out to us for guidance on the appropriate strategy for your situation.
In this article:
- Income limits for Roth IRAs
- Roth IRA strategies for high-income households
- Questions to discuss with us
Income limits for Roth IRAs
To directly contribute to a Roth IRA, your income must fall below thresholds set annually by the IRS. For 2025, the modified adjusted gross income (MAGI) phaseout ranges for Roth IRA direct contributions are:
- $150,000 to $165,000 for individuals filing as single or head of household
- $236,000 to $246,000 for married couples filing jointly
- $0 to $10,000 for married individuals filing separately
If your income is above these thresholds, it may be worth considering the following strategies.
Roth IRA strategies for high-income households
Roth IRAs offer many benefits, such as the potential for tax-free growth and tax-free withdrawals that are not subject to required minimum distributions (RMDs). Here are a few ways high-income earners can leverage this tax-advantaged account:
1. Roth 401(k)
What it is: A Roth 401(k) is a retirement savings account that may be offered as part of an employer-sponsored 401(k) plan. It allows you to make after-tax contributions that have tax-free growth and tax-free withdrawals that are not subject to RMD requirements.
How it works: A Roth 401(k) is similar to a Roth IRA, but the key differentiator is that it’s tied to your employer and its contributions limits. While there are no income limits to be able to contribute, you are subject to IRS limitation on the amount you can contribute. The maximum you can contribute to a Roth 401(k) is $23,500 in 2025 ($31,000 for investors age 50 and older and $34,750 for investors 60-63), but that ceiling includes pre-tax contributions to a 401(k) as well.
2. Backdoor Roth IRA
What it is: A backdoor Roth IRA — also known as an after-tax Roth conversion — is a strategy in which you make post-tax contributions to a new or existing traditional IRA (up to $7,000, or $8,000 for people 50 and older in 2025) and then simply convert those funds to a Roth IRA.
How it works: Because traditional IRAs do not have any income restrictions on after-tax contributions, a backdoor Roth IRA allows high earners to access Roth IRAs through a conversion strategy. If the only assets in any of your traditional IRAs are after-tax contributions, there is no taxable event with a backdoor Roth IRA because your after-tax contributions are not subject to income tax when converted to a Roth IRA. If you have pre-tax assets in any of your traditional IRAs, connect with your tax professional as there are special tax rules that apply to determining the taxable amount of a Roth conversion from an IRA.
3. Mega backdoor Roth IRA
What it is: A mega backdoor Roth IRA — also known as a 401(k) after-tax Roth IRA conversion — is a strategy in which you convert after-tax contributions from your 401(k) plan to a Roth IRA. If you are max funding your 401(k) deferral limit and want to put away more money, this strategy may make sense for you. Not all 401(k) plans offer this capability, but if yours does, it presents a unique opportunity. The 401(k) limit on total employer and employee contributions far exceeds the traditional IRA limit of $7,000 or $8,000 for those 50+ years old.
How it works: After you reach the 401(k) elective deferral maximum of $23,500 for 2025 ($31,000 for age 50 and older and $34,750 for ages 60-63) and your employer adds matching funds, you may be able to add post-tax funds for a total of up to $70,000 ($77,500 for age 50 and older and $81,250 for ages 60-63). You then roll over post-tax funds to a Roth IRA. If the related pre-tax amounts are rolled to a traditional IRA, there are no tax consequences on the Roth IRA rollover.
4. Pre-tax Roth IRA conversion
What it is: A Roth IRA conversion is a strategy in which you convert deductible contributions from a traditional IRA or pre-tax assets from a 401(k) plan to Roth IRA. Typically, Roth IRA conversions are ideal for those who are in a lower tax bracket than what they expect to be in their retirement years, whether that’s due to circumstances like a career change or sabbatical. You also should have a significant timeframe before you intend to access the assets and the money to pay the taxes due on the conversion.
How it works: Because contributions to a Roth IRA must be post-tax, you have to pay taxes on the converted assets during the same calendar year you made the conversion. However, future earnings on your money will be tax-free and withdrawals will be tax-free, too, provided you’ve met certain conditions.
Roth IRA conversion calculator
Use this calculator to see how converting your traditional IRA to a Roth IRA could affect your net worth at retirement.
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Reap the benefits of a Roth IRA
Even if you exceed the income thresholds for a Roth IRA, we can help you identify how you can benefit from such a tax-advantaged account.