Roth IRA Limits? Are you Stymied?

The Fungible Roth: An alternative to the Roth IRA income limits

by Michael C. Valdez, CFP®, AIF, CLU 

Roth IRA limits can be frustrating.  High income earners often need an alternative to the conventional Roth IRA in order to take advantages of the good characteristics of this retirement savings vehicle.

  Roth IRA Income Limits Comparison Chart

Chart reproduced from US Government IRS Website.

A Fungible Roth may be an Alternative to Roth IRA limits

Do you find that your income is too high or the amount you can contribute comes up short?  There is an alternative called to get around the Roth IRA limits called a Fungible Roth.

The Fungible Plan Advantages

Are you are in a top tax bracket or find that the IRA limits don’t satisfy your retirement plans for saving and building tax preference income?  You may want to explore some of the following advantages:

Privacy and control of all contributions and distributions

If a business owner has been required to contribute to others in a qualified plan (401(k)) they may be able to maximize their own contributions with this plan.  Qualified Retirement Plans are part of the public record.  These alternative plans have no public records for outsiders to access.

Maximization of the current tax laws

This plan may be an option if a person has already maximized their current retirement plans. A Fungible IRA is an underutilized and little known application.

Wealth preservation

There is no access under Florida Law to predators, creditors and other mean people. Your invested dollars not only grow tax deferred but under many states laws your savings may not be confiscated, reduced or attached. Laws do vary depending based on your state of residence. In the state of Florida these rules of wealth preservation do apply.


You decide how conservative or aggressive the asset allocation is to be and maintain the flexibility to make changes daily. Your investment allocations will have a wide range of investment potential.

Fewer Limitations

A person is not limited by the IRS’s Roth IRA income limits or the age limitations. These plans are not for everyone.  A person must qualify based on net worth, income and health status.

Contributions are made from current investment accounts or income. You may consider repositioning taxable assets from your balance sheet to tax sheltered growth. This is usually considered as part of a more comprehensive financial plan.  It depends on how you choose to build your future income streams of tax free and taxable income as part of your retirement income plan.

More options than traditional IRA

While this asset base is growing the plan may include an option to utilize and access tax free dollars to fund health care cost in retirement.  This includes long term care , assisted living and or memory care.

Unlike IRA restrictions and rules, you can take tax preference income by starting and stopping when you want, not when the IRS tells you that you must.  If appropriately managed during your lifetime these distributions are tax free.

Remaining and unused balances in your Roth Alternative are left as a legacy for family or a favorite charity.

Complicated but doable

These plans are not for everyone and not everyone will qualify. We can achieve these results by turning the tax code upside down.  A max funded cash value life insurance policy is the funding method. Depending on the plan design preferences of the plan owner there are options from most conservative to more aggressive.  This is done by utilizing specific products designed by the companies for cash accumulation and efficient tax free distributions. This strategy is efficient because we only purchase and maintain the minimum death benefits required in the tax code. The value of cash value to death benefit amount varies by age. If you can qualify this is an alternative you may want to investigate.

Fungibility Definition | Investopedia

Stymied by the Roth IRA limits?  Contact us for free consultation on options customized for your needs.

For more information and to see if you qualify, contact me, Michael C. Valdez,via email at or call 813-523-4706.


Securities and advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. LPL Financial is under separate ownership from any other  named entity.

This information is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal professional. No system or financial planning strategy can guarantee future results.

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