IRS does allow backdoor Roth conversions

instead of just removing the income limitations on Roth contributions?

Not everyone does a backdoor Roth though. The prorata rule is a big impediment. Another is whether or not it's actually smart to contribute to a Roth vs a pretax plan. Most people in the top marginal brackets should be contributing to pretax plans.

Not everyone does a backdoor Roth though. The prorata rule is a big impediment. Another is whether or not it's actually smart to contribute to a Roth vs a pretax plan. Most people in the top marginal brackets should be contributing to pretax plans.

I have a guy making $750k a year and his advisor convinced him to do Roth 401k. Sigh.

One of my clients is a high earner and maxes out a Roth 401k instead of a pretax. He's convinced he's going to be in the top tax bracket his entire life. Those are his words. I've had the conversation with him a couple of time...minimizing income tax over the course of his life, the time value of money, how -- despite his assumption -- most individuals find themselves in a lower top bracket during retirement than while working. He remains convinced that he knows best.

It is what it is.

One of my clients is a high earner and maxes out a Roth 401k instead of a pretax. He's convinced he's going to be in the top tax bracket his entire life. Those are his words. I've had the conversation with him a couple of time...minimizing income tax over the course of his life, the time value of money, how -- despite his assumption -- most individuals find themselves in a lower top bracket during retirement than while working. He remains convinced that he knows best.

It is what it is.

I do have a fair number of clients earning more in retirement than when they worked, so they obviously do exist. But I also came across a client with AGI under $100k and the deeper I dive into some IRA nonsense they stated that made no sense to me, it seems they did a backdoor conversion. They were already being disallowed pre-tax contributions because of being covered by an employer 401k, so I guess they figured backdoor would bypass it (actually, no, they didn't think about it--they just did it).

Between this, rental improvement expense segregation, and energy credit BS, I am really tired of taxes right now.