Roth accounts are among the most valuable places to save: already taxed money grows tax-deferred, qualified withdrawals are tax-free, and Roth IRAs have no required distributions during the owner’s lifetime. The catch for many physicians, business owners, and executives is that they earn too much to contribute directly.
For 2026, direct Roth IRA contributions phase out between $242,000 and $252,000 of income for married couples filing jointly.
IRS
For single filers, the phase-out range is $153,000 to $168,000.1 Above those levels, direct contributions aren’t allowed. But two strategies remain available to many high earners.
The options, side by side
Four ways to get money into Roth accounts Each has different limits and requirements. | |
Direct Roth IRA | Up to $7,500 for 2026 Only available below the income limits. |
Roth 401(k) | No income limit If your employer plan offers a Roth option, you can direct some or all of your $24,500 in deferrals there. |
Backdoor Roth IRA | A two-step workaround Make a nondeductible traditional IRA contribution, then convert it to a Roth. It works cleanly only if you have no other pre-tax IRA balances. |
Mega backdoor Roth | Potentially much more Some 401(k) plans allow after-tax contributions beyond your deferrals, up to the $72,000 total plan limit for 2026, which can then be converted to Roth. Your plan has to allow it. |
Educational information only, not tax advice. Whether any strategy fits depends on your full situation. Talk with your CPA first. | |
The pro-rata trap
The backdoor Roth has one rule that catches many people. When you convert, the IRS looks at all of your traditional, SEP, and SIMPLE IRAs together. If you have pre-tax money in any of them, part of your conversion becomes taxable.2
– Check your IRA balances first. Old rollover IRAs or a SEP IRA from a side business can create an unexpected tax bill.
– Look at your employer plan. Some people move pre-tax IRA money into their 401(k), if the plan accepts it, to clear the way. Whether that makes sense depends on the plan.
– File Form 8606. It documents the nondeductible contribution. Missing it is one of the most common and costly mistakes.2
– Ask about after-tax contributions. Many people don’t know whether their 401(k) allows the mega backdoor. Your plan documents or HR department can tell you.
Where I come in
I help clients figure out which Roth strategies their accounts and employer plans allow, sequence the steps correctly, and coordinate with their CPA so the reporting is done right. For high earners who save consistently, it can add up to a meaningful pool that can provide tax-free income if qualified distribution provisions are met.
Earn too much for a Roth IRA? Let’s see which doors are still open to you.
About the author Matthew Holbrook, CFP® Holbrook Group, Coastline Wealth Advisory of LPL Financial |Newport Beach Matt has spent over 2 decades helping families, business owners, and professionals coordinate their investments, taxes, and estate plans. He works directly with each client and their CPA and attorney, so every decision pulls in the same direction. |
Sources
1. IRS, 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500.
2. Sensible Money, Backdoor Roth IRA strategy for high earners.
Important Disclosures
LPL Tracking #1187496.
Roth contributions offer tax deferral on any earnings in the account instead of immediately lowering taxable income. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply. To qualify for tax-free withdrawals, you must generally be age 59½ and hold the converted funds in the Roth IRA for at least five years. Each conversion has its own five-year period, and early withdrawals may be subject to a 10% penalty unless an exception applies. Income limits still apply for future direct Roth IRA contributions. This material is for general information only and is not intended to provide specific advice or recommendations for any individual. LPL Financial and its representatives do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your specific situation.
Matthew Holbrook is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/ SIPC.