Mega Backdoor Roth: The High-Earner Tax-Free Strategy

How after-tax 401(k) contributions let you shelter up to $72,000 per year in tax-free accounts

The mega backdoor Roth takes advantage of the gap between the employee deferral limit ($24,500) and the total defined contribution limit ($72,000). The difference can be filled with after-tax contributions that are then converted to Roth - tax-free.

The Three 401(k) Contribution Types

Pre-Tax / Traditional: $24,500 limit, tax-deferred growth
Roth: $24,500 limit (shared), after-tax in, tax-free out
After-Tax (Non-Roth): Up to $72,000 total limit, the mega backdoor secret

Does Your Plan Support It?

You need two features: after-tax contributions AND in-plan Roth conversion (or in-service distribution). About 50% of large employer plans offer both.