If you are looking for ways to boost your Roth IRA or Roth 401(k), these lesser-known paths can help you get around the roadblocks, writes Laura Saunders for The Wall Street Journal.

These paths are useful for savers who are attempting to move more dollars into their Roth accounts before the end of 2025, when the 2017 tax cuts expire. If Congress does not act, income-tax rates will reset higher after that date.

Roth accounts are coveted because both growth and withdrawals can be tax-free. This can reduce other levies, such as income-based Medicare premiums and the 3.8 percent net investment income surtax.

“Everybody with Roth accounts loves them,” said Martin James, a CPA and adviser with Modern Wealth Management. “They’re like sacred money.”

In-plan 401(k) conversions can be used to allocate more money into Roth accounts. A saver can move dollars from an employer’s traditional 401(k) plan into a Roth 401(k) option. A saver has to pay taxes on the move, but since these moves are with existing dollars, there is usually no limit on them.

However, employees who want to utilize this option have to work at companies that have Roth 401(k)s, and the rules must allow for these swaps.

In-service distributions allow an employee to roll money out of a company’s traditional 401(k) into their own traditional IRA or a Roth IRA while they are still working. While traditional IRA rollovers can be tax-free, rollovers to a Roth IRA are taxable.

Another option that has recently become more popular for business owners is solo 401(k)s, whether they are for their principal occupation or a side business. This year, a business owner can put up to $76,500 into a solo 401(k).

Fred Hubler, the CEO and Chief Wealth Strategist at Creative Capital Wealth Management Group in Chester Springs, also likes Roth accounts.

“The problem with Roth accounts is when you finally make serious money to put away, you make too much to be allowed to contribute,” he said. “For our clients, we utilize overfunded life insurance policies. When done correctly, this will allow tax-free growth and withdraws even before retirement age. And no income limits!” 

Read more about the Roth accounts in The Wall Street Journal.

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