By David C. D’Albero II
If you’re like many successful executives today, you know that real wealth management isn’t about following the crowd — it’s about finding smart, strategic moves that set you apart. One of the most overlooked opportunities? The Roth IRA.
Even if you’re a high earner and have phased out of making direct Roth contributions, there are still creative ways to take advantage of what may be the most powerful tool in long-term, tax-free wealth building.
At Strata Capital, we believe in pulling back the curtain on strategies that most traditional advisors don’t talk about — and in creating a higher standard for how wealth should be managed. Here are three Roth strategies worth paying attention to as we head into 2025.
Using After-Tax Contributions From Your 401(k)
Most people think once they hit the regular 401(k) limit — $23,500 if you’re under 50 or $31,000 if you’re over 50 — they’re done. But for those with the right kind of 401(k) plan, that’s just the beginning.
If your company’s 401(k) allows after-tax contributions, you can go above and beyond the standard limits. Even better, those after-tax dollars can often be rolled into a Roth IRA, sometimes immediately. Think of it as a turbocharged Roth contribution — significantly more powerful than the standard route.
For example, let’s say you max out your pretax 401(k) contributions and your plan allows an additional $20,000 in after-tax contributions. Rather than leaving that money inside the 401(k), where future withdrawals might be taxed, you could roll it into a Roth IRA each year, setting yourself up for decades of tax-free growth.
Not every plan offers this feature, so it’s important to review your 401(k) options carefully. Done properly, this strategy can create a major boost in future tax-free income.
The Backdoor Roth Contribution
For high-income earners, direct Roth contributions are often off the table. But the Backdoor Roth strategy offers a smart, perfectly legal workaround.
The process is simple. First, you make a non-deductible contribution to a traditional IRA — up to $7,000 if you’re under 50 or $8,000 if you’re over 50. Then, you immediately convert those funds into a Roth IRA.
If you don’t already have a large balance in traditional IRAs, this process can be relatively seamless. However, if you do have significant pretax dollars sitting in traditional IRAs, you’ll need to watch out for the pro-rata rule, which can create a partial tax bill when converting. This is where planning ahead — and potentially consolidating accounts or making strategic moves — can make a big difference.
The beauty of the Backdoor Roth is that it allows high earners to continue building Roth assets even when income limits would otherwise stand in the way. Over time, having a tax-free pool of assets to draw from in retirement can give you enormous flexibility — especially if tax rates rise in the future.
Opening a Roth IRA for Your Child
When people think about Roth IRAs, they often think about retirement planning for themselves. But opening a Roth IRA for your child is one of the most powerful legacy-building moves you can make.
The rules are straightforward: if your child has earned income from a job — mowing lawns, babysitting, tutoring, or part-time work — they’re eligible to contribute to a Roth IRA. The contribution limit is the lesser of their earned income or the standard IRA contribution limit.
Imagine your teenager earns $2,000 over the summer. You can help them contribute that $2,000 into a Roth IRA. Left untouched, that one contribution could potentially grow into over $100,000 by the time they reach retirement age, assuming a modest average annual return. And if they contribute for a few more years during high school or college? The compounding potential is enormous.
Besides the financial benefit, this strategy plants the seeds of smart financial behavior early. It teaches the value of saving, investing, and thinking long-term — skills that will serve them for a lifetime.
Why Timing Matters
All of these strategies are available today, but they may not be available forever. Tax laws change. Political priorities shift. Windows of opportunity close.
Taking action now can position you — and your family — to capture the full benefits of tax-free growth while it’s still possible. These moves aren’t about taking risks. They’re about using the rules strategically to strengthen your long-term financial foundation.
Of course, no one’s financial situation is exactly the same. That’s why at Strata Capital, we don’t believe in one-size-fits-all advice. We work with each client to design a plan that fits their career stage, their wealth goals, and their vision for the future — coordinating retirement planning, investment strategy, tax planning, and legacy building into one seamless, personalized experience.
If you’d like to explore how these Roth strategies could fit into your overall plan, we’re here to help.
Strata Capital is a wealth management firm serving corporate executives, professionals, and entrepreneurs in the New York Tri-State Area, focusing on corporate benefits and executive compensation. Co-founded by David D’Albero and Carmine Coppola, the firm specializes in making the complex simple to ensure clients feel confident in their financial decisions. They can be reached by phone at (212) 367-2855, via email at carmine@stratacapital.co, or by visiting their website at stratacapital.co.
Cornerstone Planning Group, Inc., (“CSPG”) is an SEC registered investment advisory firm. The information contained herein should not be construed as personalized investment advice and should not be considered as a solicitation for investment advisory service. The information (e.g., tax ) provided is believed to be accurate however CSPG does not guarantee or otherwise warrant such information. For more information regarding CSPG you can refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov) and review our Form ADV Brochure and other disclosures.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.