If you are a high-earning DIY investor in the home stretch of your career, you finally have the "two-comma" problem: the kids are independent, your income is peaking, and you have significant discretionary cash. The natural instinct is to shove as much as possible into a Roth IRA.

But as an hourly financial planner, I see that "gut instinct" lead to some expensive tax blunders. Here are the top five Roth mistakes I see retirees (and pre-retirees) making in 2026. You can also watch my video on this topic here.

1. Funding Roth Accounts at Your Peak Earnings

The biggest mistake is funding a Roth account during the years when your income—and your tax bracket—is the highest it will ever be.

If you are in a 30% or 35% bracket today, but you expect to be in a 12% or 22% bracket in early retirement (before Social Security kicks in), you are essentially overpaying for your tax-free growth. It often makes more sense to take the tax deduction now via a Traditional 401(k) and save the "Roth moves" for your lower-income retirement years.

2. Ignoring the "Mega Backdoor" Roth 401(k)

Many "super savers" in tech or finance think they are limited to the standard annual Roth IRA contribution limits (which are relatively small). However, many large company 401(k) plans allow for after-tax contributions that can be immediately rolled over into a Roth 401(k).

This "Mega Backdoor" can allow you to funnel tens of thousands of extra dollars into a Roth environment every year. If your plan offers it, it is a game-changer for building a tax-free "bucket."

3. The "Never Spend" Mentality

There is a common belief that Roth money should be the very last thing you touch. While that is a good general rule, it can lead you to miss out on "Tax Cliffs."

For example, if you are using the ACA (Obamacare) for health insurance before age 65, your premium tax credits depend heavily on your Modified Adjusted Gross Income (MAGI). If you need an extra $20,000 for a vacation or a home repair, taking it from your IRA might push you over a cliff and cost you $15,000 in lost health insurance subsidies. Taking that money from your Roth IRA instead keeps your income "invisible" and protects those subsidies.

4. Avoiding Roths Entirely Because of Small Limits

On the flip side, some investors ignore Roth IRAs because they feel the $7,000–$8,000 annual limit isn't worth the paperwork compared to their multi-million dollar portfolio.

Don't underestimate the power of compounding. Over a decade or two, those "small" amounts grow into a significant tax-free hedge. Having even a mid-sized Roth account gives you the tactical flexibility to manage your tax brackets later in life.

5. "Keeping Up with the Joneses" on Conversions

Never compare your Roth conversion strategy to your neighbor's. Their "perfect" plan might be a disaster for you because goals differ:

• The Charitable Neighbor: If your friend plans to leave their entire IRA to a church or charity, they shouldn't do Roth conversions. Charities don't pay taxes on IRA distributions, so converting just wastes money on taxes that would have otherwise been avoided.

• The Legacy Builder: If your goal is to leave money to your children who are already in the top 37% tax bracket, you might do aggressive conversions now (even at a 24% or 32% bracket) to save them from a 40%+ tax hit later.

Final Thought

Roth planning isn't just about "tax-free growth"—it's about tax bracket arbitrage. You want to pay the tax when it’s on sale (low brackets) so you don't have to pay it when it’s full price (high brackets).

At Barrett FP LLC, we offer expert financial planning on an hourly basis. We can provide a second set of eyes on your Roth strategy to ensure you aren't overpaying the IRS.

Ready to audit your Roth strategy?