How Should High Earners ($300K+) Approach Retirement Planning?

What Tax Challenges Are Unique to High Earners?

At $300K+ household income: - Roth IRA contributions are phased out (backdoor Roth required) - Itemized deductions are less impactful (SALT cap at $10,000) - Net Investment Income Tax adds 3.8% on investment income above $250,000 (MFJ) - Medicare IRMAA surcharges begin at $206,000 MAGI - AMT may apply depending on deduction mix - Social Security tax cap ($176,100 in 2025) means no SS tax on earnings above that — but also lower replacement ratio

The analysis engine models all of these interactions year by year, which is why high earners often see counterintuitive results — like lower success rates than expected despite high income, because spending typically scales with income.

What Strategies Have the Most Impact?

1. Max all tax-advantaged space: 401(k) ($31,000+), HSA ($9,550 family), backdoor Roth ($8,000), mega backdoor Roth ($30K-46K). Total potential: $80,000-95,000/year in tax-advantaged savings.

2. Deferred compensation: If offered by employer, allows pre-tax deferral beyond 401(k) limits. Risk: deferred comp is an unsecured creditor claim against the employer.

3. Donor-Advised Fund bunching: Concentrate 3-5 years of charitable giving into one year to exceed the standard deduction, then distribute grants over time.

4. RSU/stock option timing: Plan exercises and sales around AMT calculations, NIIT thresholds, and state residency changes.

5. Roth conversion during income gaps: Sabbaticals, career transitions, or early retirement create low-income years ideal for conversions.

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