Tax-free later, potentially -
even at higher incomes.
A Roth account grows tax-deferred and, in retirement, qualified withdrawals come out free of federal income tax - but direct contributions phase out as income rises. Three strategies let higher earners get money into a Roth anyway. Here’s how each one works, who qualifies, and the traps to avoid. Confirm the details with your CPA before you act.
Reviewed by Peter Tennyson, CFP® · Last updated October 2026
This guide is general education, not advice. ‘Tax-free’ refers to qualified withdrawals free of federal income tax when holding-period and age rules are met; state treatment varies. Figures reflect 2026 IRS limits. Confirm the details with your CPA before you act. Full disclosures
Pay tax on the seed, not the harvest.
Once money is in a Roth, qualified withdrawals of both contributions and decades of growth come out entirely free of federal income tax.
Unlike traditional IRAs and pre-tax 401(k) accounts, Roth IRAs have no required minimum distributions during the original owner's lifetime. The same is true for designated Roth accounts in workplace retirement plans under current federal law.
Having Roth alongside pre-tax and taxable accounts gives you dials to turn in retirement - managing your bracket, Medicare premiums, and heirs’ taxes.
The catch for high earners: the ability to contribute to a Roth IRA directly phases out as income rises - for 2026, between $153,000 and $168,000 of modified AGI for single filers, and between $242,000 and $252,000 for married couples filing jointly. Above the top of the range, direct contributions aren’t allowed. (These figures are indexed and change each year.) The three strategies below are the legal side doors.
Three ways in. Pick one to explore.
Each route gets money into a Roth by a different door. Select one to see how it works step by step, who it tends to fit, and the main thing to watch.
The pro-rata rule.
This single rule is the one most worth understanding before you start.
When you convert, the IRS looks at all your traditional, SEP, and SIMPLE IRAs together - you can’t cherry-pick only the after-tax dollars. If you have existing pre-tax IRA money, part of your “tax-free” conversion becomes taxable, in proportion to how much of your total IRA balance is pre-tax.
A common fix is to first roll existing pre-tax IRA balances into an employer 401(k) - which is excluded from the calculation - leaving only after-tax dollars to convert cleanly. The plan has to accept roll-ins, and the rollover has to be complete by December 31 of the conversion year, since the pro-rata calculation uses year-end balances. The timing and mechanics matter, so this is a coordinate-with-your-CPA step, not a do-it-blind one.
How the three compare.
Limits shown are IRS figures for the 2026 tax year and are indexed for inflation, so they change over time; catch-up amounts for those age 50+ (and enhanced catch-ups for ages 60–63) differ. Availability of the mega backdoor Roth depends entirely on whether your employer’s plan permits after-tax contributions and in-service conversions - many do not.
The terms, in plain language.
{{ g.def }}
The right strategy, in the right order.
These moves are simple in theory and easy to fumble in practice - the pro-rata rule, the timing of conversions, coordinating a 401(k) rollover, and deciding how much to convert in a given year all reward careful sequencing. We help you see which routes you’re eligible for, model the tax impact with your CPA, and put the mechanics in the right order.
We coordinate closely with your tax professional - we don’t replace them. If Roth strategy is on your mind, it’s worth a conversation well before year-end deadlines.
Which door is yours?
Let’s look at your income, your accounts, and your plan together - and map the cleanest way to build tax-advantaged savings, coordinated with your CPA.
This guide is general education, not advice. It describes how these strategies generally work. North Bay Wealth Management does not prepare tax returns or provide legal advice; tax-related planning is coordinated with your CPA, who leads on filing. The steps and figures shown are simplified illustrations and may not reflect current law or your complete situation. Contribution and income limits are IRS figures for the 2026 tax year, are indexed for inflation, and change; catch-up amounts and phase-outs vary by age and filing status. Eligibility, particularly for the mega backdoor Roth, depends on your income, your other retirement accounts, and your employer’s plan. The pro-rata rule and conversion timing can create unexpected taxable income if handled incorrectly. Nothing here is investment, tax, legal, or accounting advice, a solicitation, or a recommendation to use any strategy or to open, fund, or convert any account, and reading it does not create an advisory relationship. Investing involves risk, including the possible loss of principal, and past performance is no guarantee of future results. Confirm everything with your own CPA or tax professional before acting.