Mega Backdoor Roth.
In plain English
A mega backdoor Roth is a 401(k) strategy, not an IRA one. Some workplace plans let you make after-tax contributions on top of your regular contributions, up to the high overall 401(k) limit. You then move that after-tax money into a Roth, either a Roth 401(k) inside the plan or a Roth IRA outside it. The result is far more Roth money per year than the standard Roth IRA limit allows. It only works if your specific plan permits both after-tax contributions and in-plan conversions or withdrawals.
01Why it matters
It can let a high earner stash tens of thousands of extra dollars into tax-free growth each year, but only if their employer's plan is set up to allow it, which many are not.
02The math, step by step
Your plan allows after-tax contributions and in-plan Roth conversions. After maxing your regular 401(k) deferral, you add after-tax dollars up to the total plan limit, which for 2026 is $72,000 in combined employee and employer additions (per irs.gov), then immediately convert those after-tax dollars to Roth so future growth is tax-free.
03What this is NOT
It is not the IRA version. The backdoor Roth uses a small traditional IRA contribution. The mega backdoor moves much larger after-tax 401(k) contributions, and it depends entirely on whether your employer's plan offers the feature.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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