Mega Backdoor Roth IRA’s

If you're a high-income earner looking to boost your tax-advantaged retirement savings, the Mega Backdoor Roth IRA could be a powerful tool, but only if your employer plan allows it…

​How It Works
The Mega Backdoor Roth lets you contribute after-tax dollars to your 401(k) beyond the standard $23,500 limit (or $31,000 if 50+), up to the total 401(k) contribution cap of $70,000 for 2025 (including employer match).
 
The Process

1. You contribute after-tax dollars to your 401(k) above the regular limit.
2. You then roll that amount into a Roth IRA (or the Roth portion of your 401(k)).
3. Growth and withdrawals in retirement are tax-free, assuming Roth rules are met.

 
Who Is Eligible
To qualify, your 401(k) plan must:

• Allow after-tax contributions, and
• Allow in-service withdrawals or conversions to a Roth account.

 
Who It’s Best For

• High earners who exceed Roth IRA income limits
• Savers who have maxed out traditional 401(k) and IRA contributions
• Those planning for tax-free income in retirement

 
The Mega Backdoor Roth can allow you to put away tens of thousands more each year in Roth savings — significantly more than a regular Roth IRA’s $7,000 annual cap ($8,000 for 50+).
 
There’s a lot to this strategy with different plan rules, timing of rollovers, etc. It’s best to check with your employer plan to see if eligible, and your financial advisor to review suitability for your overall finances.