Get your free financial scoreSign inYour data on this device
Free to use. No account required.

What is a mega backdoor Roth through my 401(k) and who can actually do it?

The mega backdoor Roth lets high earners get far more into Roth than the normal limits allow. It requires a plan that offers both after-tax (non-Roth) contributions and either in-plan Roth conversions or in-service withdrawals to a Roth IRA. You max your regular deferrals, receive the match, then contribute after-tax dollars up to the overall Section 415(c) combined limit, and immediately convert those after-tax dollars to Roth.

Because you convert right away, little or no growth is taxed on conversion. This can add tens of thousands in tax-free Roth savings each year. The catch is that both features must exist in your specific plan, and many plans lack them. Ask your plan administrator whether after-tax contributions and prompt conversions are available before counting on this strategy.

All questionsBrowse the articles
Educational disclaimer. Everything on WealthSerene.com is educational and is not investment advice. Projections and calculations are illustrative; actual results depend on market conditions, your situation and factors outside this tool’s scope. For a decision specific to your situation, consult a qualified financial professional. View full disclosures