High-Income Earners May Have Trouble Saving For Retirement: Your Guide to Overcoming Some Surprising Roadblocks

Key Takeaways:

• High-income earners may face income limits that restrict access to certain tax-advantaged retirement savings strategies.
• Maximizing a 401(k) and evaluating traditional IRA contributions can help high earners build tax-advantaged retirement savings.
• A backdoor Roth IRA may offer high-income earners another way to build Roth retirement savings when direct Roth IRA contributions are limited.

Updated September 2026

You know preparing and saving early is key to reaching your retirement goals - but as someone who makes six figures or more, you may have encountered some roadblocks. High-income earners face several financial hurdles when it comes to preparing for retirement, as their income can actually limit them from utilizing certain tax-advantaged retirement savings strategies. If you make six figures or more, you know you need to plan now in order to maintain your lifestyle through retirement. Here are three things highly compensated executives and employees like you can do to save for retirement.

Why Can Retirement Planning Be More Challenging for High-Income Earners?

The IRS offers several tax-advantaged retirement savings options. Some of these options, however, offer income limits - making it harder for high earners to take advantage of certain tax-saving strategies. But high earners face the same challenge as moderate- to low-income earning employees: sustain a similar lifestyle in retirement by maintaining financial independence. When high earners are limited in their options for saving for retirement, it can make reaching their goals for retirement more challenging.

Retirement Saving Strategies

Once you’re able to identify the roadblocks you may be facing, focus your attention on the retirement saving strategies that may work best for you and your family.

Strategy #1: Contribute to a 401(k)

If you aren’t doing so already, contributing to an employer-sponsored 401(k) plan is an effective place to start saving for retirement. In 2026, you can contribute up to $24,500 to a 401(k) or similar employer-sponsored retirement plan. If you're age 50 or older, you can generally contribute an additional $8,000, bringing the total to $32,500. Employees ages 60 through 63 may have a higher catch-up limit of $11,250 in 2026.1 Many employers will offer matching contributions as well, up to a certain percentage of your contributions.

The overall 401(k) contribution limit for 2026 is $72,000, excluding catch-up contributions. Including the regular $8,000 catch-up contribution, the limit can reach $80,000 for eligible participants age 50 and older, or up to $83,250 for participants ages 60 through 63 who qualify for the higher catch-up contribution.¹

For 2026, the IRS limits the amount of compensation that can be considered when calculating certain employer and employee contributions to $360,000. This limit does not mean you have to stop making your own 401(k) contributions once your compensation reaches $360,000. Your plan's rules and the annual employee deferral limit determine how much you can contribute.²

As a high earner, your 401(k) will likely offer one of the highest contribution opportunities for tax-advantaged retirement savings - making it an important cornerstone of your retirement saving strategy.

Strategy #2: Traditional IRA

Roth IRA contributions are subject to income limits. In 2026, the ability to contribute directly to a Roth IRA phases out for taxpayers with modified adjusted gross income between $153,000 and $168,000 as a single filer or head of household, and between $242,000 and $252,000 as a married couple filing jointly. Taxpayers whose income exceeds the applicable range generally cannot make a direct Roth IRA contribution.¹

A traditional IRA, however, does not have an income limit for making contributions, which makes it an available option for high earners. It’s important to note, however, that you may be limited in how much of your IRA contribution you can deduct on your tax return.

How much you are able to deduct from your taxes will depend primarily on two things:

• Your modified adjusted gross income
• Whether or not you actively contribute to your employer-sponsored retirement plan (such as a 401(k))

For 2026, the IRA contribution limit is $7,500, or $8,600 for individuals age 50 or older.¹

Strategy #3: Backdoor Roth IRA

Building on the strategy above, those interested in tax-free withdrawals in retirement - but aren't eligible to utilize a direct Roth IRA contribution - may benefit from a backdoor Roth IRA. As the name suggests, this strategy offers high-income earners a roundabout entrance into placing their after-tax dollars into a Roth IRA account.

To do this, you'll generally have to:

• Open and contribute to a traditional IRA, typically as a nondeductible contribution.
• Have an account administrator provide the paperwork and instructions for converting your traditional account into a Roth IRA.
• Prepare to pay taxes on the taxable portion of the conversion, including any applicable gains.

If this sounds like an option you may be interested in pursuing, your financial advisor or CPA will be able to offer more guidance and instruction regarding this process. Keep in mind that the tax treatment can be more complicated if you have existing pre-tax balances in traditional, SEP, or SIMPLE IRAs.