What is a Mega backdoor roth?
A Mega backdoor roth is an advanced retirement savings strategy that enables high-income earners to contribute substantially more than standard limits to Roth 401k accounts or Roth IRAs through after-tax 401k contributions. The strategy utilizes the total 401k contribution limit of $70,000 for 2025 by making after-tax employee contributions beyond standard deferrals and employer matching, then converting those after-tax amounts to Roth accounts through in-plan conversions or IRA rollovers. The employer plan must permit both after-tax contributions and either in-plan Roth conversions or in-service distributions of after-tax balances. This technique works alongside Traditional 401k strategies to create comprehensive retirement planning approaches that maximize tax-free wealth accumulation over decades of compound growth.
.png){kind=small}