You’ve mastered the basics. You’re maxing out your 401(k), you’ve got a healthy Roth IRA, and your Health Savings Account (HSA) is humming along. You’re doing everything “right,” but you’re left wondering: What’s next?

For high-earning professionals, especially those with a side business, this is the critical frontier of financial planning. The standard advice no longer applies, and the path to building next-level wealth requires more advanced strategies.

Let’s look at the case of “Alex and Taylor.”

The Profile: High Earners Hitting the Contribution Ceiling

Alex, 42, is a software engineering manager with a total compensation of $240,000. Taylor, 38, is a marketing director earning $190,000. They live in a major metropolitan area, are in their prime earning years, and are fiercely disciplined savers.

Their Financial Foundation:

• Retirement Accounts: $1.2 million across their 401(k)s and Roth IRAs.
• Taxable Brokerage Account: $400,000.
• HSAs: Fully funded and invested.

Their Current Savings Regimen:

• They max out their 401(k) employee contributions every year.
• They both execute a “Mega Backdoor Roth” strategy within their 401(k) plans, allowing them to contribute significant after-tax dollars and convert them to Roth funds.
• They fully fund their HSAs, treating them as stealth retirement accounts.

The Opportunity: The Side Hustle

Beyond their W-2 jobs, Alex has a profitable consulting LLC, helping startups with tech infrastructure. Last year, it netted $60,000 after expenses.

Their question is a great one: “We’re doing everything we know. How do we use this side business to save even more and be smarter with our taxes?”

The Advanced Play: Tapping into Self-Employed Retirement Plans

This is where moving beyond standard advice pays massive dividends. For Alex and Taylor, the golden opportunity lies in Alex’s consulting business.

While they are already maxing out their options as employees, the business itself can make contributions to a retirement plan for Alex as the employer.

The most powerful and often overlooked tool here is the Solo 401(k).

Why a Solo 401(k) is a Game-Changer:

1. Massive Contribution Limits: As the employer, Alex’s business can contribute up to 25% of the business’s net earnings (calculated as profit minus half of self-employment tax). On $60,000 of net profit, this could mean an additional ~$13,500 into a tax-deferred account, on top of everything he’s already doing with his W-2 job.
2. The “Mega” Option for the Business: Many Solo 401(k) providers allow for after-tax (non-Roth) contributions, creating a “Solo Mega Backdoor Roth” pathway. This could potentially allow Alex to contribute most, if not all, of the remaining business profit into the plan and convert it to his Roth balance, shielding future growth from taxes entirely.
3. Tax Deduction Today: The employer contribution is a business expense, directly reducing the taxable income from the side hustle.

For Alex, this could mean transforming a significant portion of that $60,000 side income from a taxable event into a powerful, tax-advantaged retirement contribution.

Beyond Retirement Accounts: Other Avenues to Explore

Once the Solo 401(k) is in place, what else can high earners like Alex and Taylor consider?

• Strategic Real Estate: Investing in rental property provides diversification, potential appreciation, and tax benefits like depreciation. While their high income may phase out some passive loss deductions, these benefits can often be realized when the property is sold or when their taxable income decreases in retirement.
• Just Keep Investing (The Simple Path): There is immense power in simply adding to their $400,000 taxable brokerage account. While it doesn’t offer an upfront tax deduction, it provides ultimate flexibility and is taxed at favorable long-term capital gains rates.
• A Warning on “Tax Alchemy”: Be wary of complex, high-fee investments marketed primarily for their tax benefits (e.g., certain oil and gas partnerships, opportunity zones). While they can be legitimate, they often carry high risk and illiquidity. The tax tail should not wag the investment dog.

The Action Plan for Super-Savers

If you see yourself in Alex and Taylor’s story, your next steps are clear:

1. Formalize Your Side Hustle: Ensure your business is a legal entity (like an LLC) and has separate bank accounts.
2. Open a Solo 401(k): Choose a provider that supports the features you want, especially if you plan to utilize the after-tax contribution option. Setting this up is a straightforward process.
3. Run the Numbers: With a CPA or financial planner, calculate the maximum employer contribution you can make from your business profits.
4. Integrate and Automate: Make your Solo 401(k) contributions a systematic part of your business’s financial routine, just like you do with your W-2 retirement plans.

The Bottom Line

When you’ve built a strong financial foundation, the path to the next level isn’t about finding a magic bullet. It’s about meticulous optimization. For high earners with a side business, leveraging a self-employed retirement plan like a Solo 401(k) is the most powerful and direct way to break through the standard savings ceiling, reduce your current tax bill, and accelerate your journey to financial independence.