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 After age 65, HSA funds can be withdrawn for any reason (taxed like an IRA if not for medical use).
Read our guide How to Use an HSA to Build Wealth to learn more about HSA’s.
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.