How to Keep More of What You Earn

People often focus on investment returns, but the most important thing is how much of those returns you actually keep after taxes. Unlike many planners who shy away from complex tax situations, the Nemes Rush team has the expertise to recommend, coordinate, and execute a variety of strategies that maximize after-tax wealth.

In this Nemes Rush Report, we spotlight a few niche strategies and new rules, from superfunding 529 plans to leveraging the latest Secure Act 2.0 retirement updates to backdoor Roth conversions, that demonstrate the power of proactive tax planning.

Superfunding 529 Plans

A 529 plan is already one of the most tax-efficient ways to save for a child’s education. Investments grow tax-free out of your estate, and withdrawals for tuition and other qualified expenses are not taxed. But many families don’t realize they can front-load five years’ worth of contributions in a single go, a move known as superfunding.

How 529 plan superfunding works

In 2025, an individual can contribute up to $95,000 at once (or $190,000 as a married couple) into a 529 account and treat it as if it were given over five years. This lump-sum contribution avoids triggering gift taxes or using up part of your lifetime gift tax exemption.

New rules have made 529 plans even more flexible

Traditionally, pulling out unused 529 funds would incur taxes and penalties on the earnings. Now, thanks to the Secure Act 2.0, you can roll over up to $35,000 of leftover 529 funds into a Roth IRA for the beneficiary, subject to certain rules around maximum yearly contributions and how long the account has been open.

Secure Act 2.0

The Secure Act 2.0, enacted at the end of 2022, brought over 90 provisions aimed at boosting retirement savings:

Later Required Minimum Distributions (RMDs)

Before Secure 2.0, retirees had to start taking RMDs at age 72. Now RMD age is 73, and it will eventually rise to 75. If you don’t need those distributions for living expenses at 72, you can keep your money invested longer, potentially yielding more compound growth.

No RMDs for Roth 401(k) accounts

A quirk in the old law forced people with Roth 401(k)s to take RMDs, even though they’re tax-free. Now, employer-sponsored Roth 401(k)s no longer have RMD requirements, so your Roth funds can stay invested for longer.

Bigger catch-up contributions at ages 60-63

To help those nearing retirement save more, Secure 2.0 boosts 401(k) catch-up limits. In 2025, individuals ages 60-63 can contribute the greater of $10,000, or 50% more than the regular catch-up amount, on top of the standard 401(k) limits.

Roth treatments for high earners’ contributions

Secure 2.0 originally included a provision, now delayed until 2026, requiring that if you earn over $145,000, any catch-up contributions to employer plans must be made as Roth contributions. While this means giving up an immediate tax deduction, it effectively seeds more money into Roth, which grows tax-free and won’t be taxed on withdrawal.

Additionally, the law now lets employers offer to deposit their matching contributions into Roth accounts if employees so choose, which is an intriguing option if you anticipate being in a higher tax bracket later or want to maximize future tax-free income. This employer contribution is counted as taxable income.

Backdoor Roth Conversions

The catch with Roth accounts is that direct contributions are off-limits for high earners. A couple filing jointly is completely phased out of directly contributing if their income exceeds $246,000. That’s where the backdoor Roth IRA conversion comes in.

Anyone, regardless of income, can convert a traditional IRA to a Roth IRA. The “backdoor” tactic involves contributing to a traditional IRA (which has no income limit for contributions, though the contribution may be non-deductible) and then quickly converting it into a Roth IRA.

Because you contributed with post-tax dollars, the conversion typically incurs minimal tax, unless you have a large IRA balance (also known as the pro-rata rule).

Proactive and Integrated Tax Planning Puts You Ahead

Our team stays ahead of tax law changes and works with you and your team of professionals to implement plans that minimize tax leakage from your portfolio. Whether it’s shielding investment growth from taxes, avoiding penalties, or passing more wealth to your heirs, a tax-informed plan is often the difference between a good outcome and a great one.

Schedule a consultation with Nemes Rush’s wealth and tax planning team to see how we can put these strategies to work for you