For high earners, retirement planning isn’t just about saving—it’s about maximizing tax efficiency. The right tax-advantaged retirement accounts can help reduce taxable income, grow wealth tax-free, and optimize withdrawals in retirement.
What Are The Best Tax-Advantaged Retirement Accounts for High Earners?
1. 401(k) and Mega Backdoor Roth 401(k)
A 401(k) plan allows tax-deferred savings, with a 2025 contribution limit of $23,000 ($30,500 for those 50+). Many high earners maximize this, but a Mega Backdoor Roth 401(k) can unlock even more savings. If your employer allows after-tax contributions and in-plan Roth conversions, you can contribute up to $69,000 total (or $76,500 if 50+). For the latest 401(k) contribution limits and IRS guidelines, visit the IRS Retirement Topics – 401(k) Contribution Limits.
2. Roth IRA via the Backdoor Method
High earners exceed Roth IRA income limits, but the Backdoor Roth IRA is a workaround. Contribute to a non-deductible Traditional IRA and then convert it to a Roth IRA for tax-free growth. Read our guide: Why Roth IRA Conversions May Make Sense.
3. Health Savings Account (HSA)
An HSA isn’t just for medical expenses—it’s a triple tax-advantaged retirement savings tool. Contributions are tax-deductible, grow tax-free, and withdrawals for medical expenses are tax-free. After age 65, HSA funds can be withdrawn for any reason (taxed like an IRA if not for medical use).
4. Defined Benefit Plans for Business Owners
Self-employed high earners can supercharge retirement savings with a Defined Benefit Plan, allowing six-figure contributions based on income. These plans work well for high-earning consultants, doctors, and business owners looking for additional tax-deferred savings.
5. Taxable Brokerage Accounts with Tax-Efficient Investments
For those maxing out retirement accounts, a taxable brokerage account with tax-efficient investments (like index funds and municipal bonds) offers flexibility and lower long-term capital gains rates compared to ordinary income tax on withdrawals from traditional retirement accounts.
Final Thoughts: Don’t Miss Out on Tax-Advantaged Retirement Opportunities
High earners have unique retirement planning opportunities that go beyond a standard 401(k). Strategic tax planning can help maximize savings and minimize tax burdens in retirement.
At Beckley & Associates PLLC, a trusted advisory, tax and accounting CPA firm in Plano, TX, we specialize in helping individuals and small business owners optimize their tax-advantaged retirement strategy. Contact us today to discover how our local expertise can support your financial success.