Roth IRA Backdoor Strategy for High Earners in 2026

In this episode, Lucas and Luna tackle the backdoor Roth IRA strategy for high-income earners who exceed the direct contribution limits. They walk through the mechanics—making a non-deductible traditional IRA contribution and converting it to Roth—and explain the pro-rata rule that can trigger a tax surprise if you have existing pre-tax IRA balances. Using 2026 income thresholds ($150,000 for singles, $236,000 for married couples filing jointly) and a concrete example with a $7,000 contribution, they clarify why this move still works for many professionals, but only if they have no other traditional IRAs. They also discuss the 'mega backdoor Roth' via employer plans, which allows contributions up to $70,000 annually for those with a 401(k) that permits after-tax contributions and in-plan conversions. Practical tips include using Form 8606 correctly and consolidating pre-tax IRAs into a 401(k) to avoid the pro-rata trap. This episode is essential for doctors, lawyers, tech workers, and anyone whose income phases them out of direct Roth eligibility. #RothIRA #BackdoorRothIRA #HighEarners #ProRataRule #MegaBackdoorRoth #TraditionalIRA #401k #TaxPlanning #RetirementSavings #Finance #Investing #WealthManagement #FexingoBusiness #BusinessPodcast #PersonalFinance #FinancialLiteracy #Form8606 #IRAConversion Keep every episode free: buymeacoffee.com/fexingo