6 ROTH Strategies to Increase Retirement Assets

A Roth IRA is one of the most powerful retirement savings tools, offering tax-free growth and withdrawals in retirement. ROTHs can be a strategic tool for building generational wealth, managing taxes, and ensuring financial flexibility. While many people contribute to a Roth IRA the traditional way, there are several creative strategies that can help you increase its benefits, even if you earn too much to contribute directly. At Cardinal Pointe Financial Group, we utilize personalized comprehensive approach to financial planning and explore innovative ways to leverage the benefits of a ROTH IRAs with our investors while aligning with your wealth management goals.

1) Backdoor ROTH IRAs: a strategy for high-income earners:

The IRS sets income limits for individuals making ROTH IRA contributions. In 2025 the limits are $150,000-$165,000 for single or head of household filers and $236,000-$246,000 for married couples filing jointly. A “Backdoor ROTH IRA” allows high-income earners an alternative.

How does it work? Make contributions to a non-deductible Traditional IRA (which has no income limits for contributions) and then immediately convert the funds to a ROTH IRA. You’ll pay taxes on any pre-tax contributions, but future growth and withdrawals will be tax-free. This widely used strategy can work better if you don’t already have a large Traditional IRA balance, and it is important to consider the pro-rata rule. At Cardinal Pointe Financial Group, our advisors would help you navigate this strategy to help avoid unnecessary tax burdens.

2) A Mega Backdoor ROTH: A Wealth Accumulation Strategy

This is an underutilized strategy for high-income earners and business owners. In 2025 the 401(k)-contribution limit is $70,000 (including the employer match). Some employers offer a powerful vehicle for large scale ROTH conversions; you’ll want to check if your 401(k)allows for an after-tax account. If your plan permits, you can contribute to an after-tax account beyond the standard$23,500 limit in 2025. You can then roll those after-tax dollars into a ROTH IRA annually and bypass the normal ROTH IRA contribution limits therefore building your tax-free retirement savings faster. Our team can help you evaluate your plan eligibility and tax implications to leverage this opportunity.

3) ROTH Conversions During Low-Income Years

For affluent individuals, business owners looking to sell their companies, or professionals transitioning into semi-retirement, this strategy may be a particularly effective, tax-efficient wealth transfer strategy.

Why it works: If you retire early or experience a temporary drop in income, your tax bracket may be lower. You can pay lower taxes on conversion when you transfer pre-tax 401(k) or IRA funds to a ROTH IRA during this period. Once converted, these funds grow tax-free and provide tax-free withdrawals during retirement.

4) ROTH IRAs Can be used as a Tax-Free Liquidity Tool or Emergency Fund

ROTH IRA contributions (not earnings) can be withdrawn anytime tax-free and penalty-free. High net worth investors often prioritize tax efficiency and liquidity; ROTH IRAs can offer both by serving as an emergency fund without triggering tax penalties and offering flexibility for investment opportunities or unexpected expenses. While it is best to leave your IRA accounts untouched prior to retirement, this strategy allows you to save for retirement without feeling like your money is locked away.

5) ROTH IRAs can be used for Estate Planning and Leaving a Legacy

ROTH IRAs have no required minimum distributions (RMDs) during an account owner’s lifetime allowing assets to compound tax-free for decades. This cane a powerful estate planning tool in several ways:

a) Heirs can inherit ROTH IRA assets tax-free if the account has been open at least five years.

b) A ROTH IRA left to a child or grandchild can continue to grow tax-free under current inherited IRA rules, which can build Muti-generational wealth for families.

c) ROTH IRAs can be integrated into trusts, strategically preserving tax advantages while ensuring assets are distributed according to a family’s wishes.

6) Using your Side-Hustle Income to fund a ROTH IRA

If you have a side business, small business, or do freelance work, and are self-employed with no employees (other than your spouse) you can use it to contribute more to a ROTH IRA by opening a ROTH Solo 401(k). This strategy can be great for entrepreneurs and self-employed professionals.

If you are unsure if these ROTH IRA strategies are right for you, consider a complimentary initial consultation with Cardinal Pointe Financial Group. We believe passionately in the power of comprehensive finance advice to change lives and communities over generations. Contact us at CardinalPointeFinancialGroup@ampf.com for a second opinion on your portfolio today!