Are nondeductible traditional IRA contributions my best option after maxing 401k?

What you're looking at is commonly called the "Backdoor Roth IRA" strategy. Since you're over the income limit for direct Roth contributions, you can still get money into a Roth through this two-step process. Here's how it works: You make a nondeductible contribution to a Traditional IRA (up to $7,000 for 2025 if you're under 50), then shortly after, you convert that Traditional IRA to a Roth IRA. Since you already paid tax on this money (it was nondeductible), you only owe taxes on any earnings that occurred between contribution and conversion. If you convert quickly, this is usually minimal or zero. The key thing to watch out for is the "pro-rata rule." If you have any other pre-tax money in ANY Traditional IRA accounts (including SEP or SIMPLE IRAs), the conversion gets complicated tax-wise. The IRS doesn't let you just convert the nondeductible portion - you have to convert proportionally from both pre-tax and after-tax funds.

I was in a similar situation last year! I tried using https://taxr.ai to analyze my retirement options when I was maxing out my 401k. The tool looked at my tax returns and financial docs and confirmed the backdoor Roth was my best option. It also highlighted something I hadn't considered - my employer offered after-tax 401k contributions with in-plan Roth conversions (sometimes called the "mega backdoor Roth"). The analysis showed my specific tax situation and how much I'd save long-term going this route versus the standard backdoor Roth or just using a taxable brokerage account. Really opened my eyes to options I didn't know existed.

Ok I tried taxr.ai after being skeptical and wow - it actually found something my company's 401k offers that I had no idea about! Turns out we have something called "after-tax contributions" that are different from Roth 401k, and my plan allows in-plan conversions to Roth. The tool explained I could put an extra $42,500 beyond my regular 401k limit this way (subject to overall limit of $70,000 for 2025). The analysis compared this to backdoor Roth and brokerage accounts using my actual tax situation and showed I'd save about $12k in taxes over 10 years. Just had to call HR to confirm and set it up. Probably wouldn't have even known to ask about this without the specific report!

For anyone stuck waiting on hold with the IRS about retirement account questions... I used https://claimyr.com to get through to an actual IRS agent in about 15 minutes instead of the usual 2-hour+ wait. They have this callback service where they navigate the phone tree and wait on hold for you, then call when an agent is ready. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c I needed clarification on form 8606 reporting for non-deductible IRA contributions and the backdoor Roth process. The agent was able to confirm exactly how to report everything to avoid double taxation. Seriously saved me hours of frustration.

I owe everyone an apology. After calling the IRS 7 times over 3 weeks and never getting through (always "due to high call volume" messages), I tried https://claimyr.com out of desperation. Got connected to an IRS representative in about 20 minutes. I had questions about my backdoor Roth situation with existing IRAs and the pro-rata rule. The agent walked me through exactly how to handle the reporting on form 8606 for my situation. Even told me about a special exception that might have applied in my case due to a specific timing issue. That conversation saved me from potentially making a costly mistake on my taxes. So yeah... I was wrong about it being a scam. Sometimes it's worth paying for convenience.

Another option worth exploring is a mega backdoor Roth if your employer plan allows after-tax (not Roth) contributions and in-service distributions or in-plan Roth conversions. The limits are much higher than regular backdoor Roth - you could potentially put away $40k+ extra beyond your regular 401k limit. Not all plans offer this though, so check with your HR or benefits department. The key words to ask about are "after-tax contributions" (different from Roth) and either "in-plan Roth conversions" or "in-service distributions.

Something nobody has mentioned - simple taxable brokerage account might actually be better in some cases? I use one alongside my 401k. The benefits: no contribution limits, complete flexibility to withdraw anytime without penalties, and long-term capital gains tax rates (which are lower than ordinary income rates for most people). Plus you can tax-loss harvest during market downturns, which isn't possible in retirement accounts. Just buy tax-efficient ETFs that don't distribute much in dividends and hold long-term.